LEBTECH BERHAD report/LEBTECH... · He served PROTON in 1985 to 1992 and his last position in ... Berhad, Dataprep Holdings ... and currently holding the position of Executive Director

LEBTECH BERHAD(590945-H)

annual report 2012

02 Corporate Information06 Profile of the Board of Directors10 Chairman's Statement14 Corporate Social Responsibility15 Statement on Corporate Governance21 Audit Committee Report25 Statement on Internal Control26 Directors’ Report29 Statement by Directors30 Statutory Declaration31 Independent Auditors’ Report33 Statements of Financial Position34 Statements of Comprehensive Income35 Statements of Changes in Equity36 Statements of Cash Flows38 Notes to the Financial Statements74 Analysis of Shareholdings76 List of Properties77 Notice of Annual General Meeting78 Statement Accompanying Notice of Annual General Meeting

Form of Proxy Enclosed

CONTENTS

CORPORATE INFORMATION

PAGE 2 LEBTECH BERHAD | ANNUAL REPORT 2012

BOARD OF DIRECTORS

NORAZMI BIN MOHAMED NURDIN(Chairman/Managing Director)

TAN SRI DATUK ADZMIBIN ABDUL WAHAB(IndependentNon-Executive Director)

DATO’ NIK ISMAILBIN DATO’ NIK YUSOFF(Independent Non-ExecutiveDirector)

DATO’ NOOR AZMAN @ NOOR HIZAMBIN MOHD NURDIN(Non-IndependentNon-Executive Director)

HAZLI BIN IBRAHIM(IndependentNon-Executive Director)

NOORAZHARBIN MOHAMED NURDIN(Non-IndependentNon-Executive Director)


CORPORATE INFORMATION

AUDIT COMMITTEE

HAZLI BIN IBRAHIM(Chairman)

TAN SRI DATUK ADZMIBIN ABDUL WAHAB

DATO’ NIK ISMAILBIN DATO’ NIK YUSOFF

NOMINATION COMMITTEE

DATO’ NIK ISMAILBIN DATO’ NIK YUSOFF(Chairman)

HAZLI BIN IBRAHIM

NOORAZHARBIN MOHAMED NURDIN

REMUNERATIONCOMMITTEE

TAN SRI DATUK ADZMIBIN ABDUL WAHAB(Chairman)

DATO’ NIK ISMAILBIN DATO’ NIK YUSOFF

HAZLI BIN IBRAHIM

NOORAZHAR BIN MOHAMEDNURDIN

COMPANY SECRETARY

Jelita binti Muhamad Salleh(MAICSA 7060739)

AUDITORS

Afrizan Tarmili Khairul AzharChartered Accountants2, Jalan Rampai Niaga 2Rampai Business Park53300 Kuala LumpurTel. No. : 603-4143 9330Fax. No. : 603-4142 9330

REGISTERED OFFICE

Wisma Lebar DaunNo. 2, Jalan Tengku Ampuan Zabedah J9/JSeksyen 9, 40000 Shah AlamSelangor Darul EhsanTel. No. : 603-5511 1333Fax. No. : 603-5511 1888Website : www.lebtech.com.my

SHARE REGISTRAR

Symphony Share Registrars Sdn BhdLevel 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/46, 47301Petaling JayaSelangor Darul EhsanTel. No. : 603-7841 8000Fax. No. : 603-7841 8151

PRINCIPAL BANKERS

CIMB Bank BerhadRHB Bank Berhad

STOCK EXCHANGELISTING

Main Market of Bursa Malaysia SecuritiesBerhad

The Malaysian economyis clearly on track toachieve high income andadvanced nation statusby 2020.


NORAZMI BIN MOHAMED NURDIN

aged 47, Malaysian, was appointed as Chairman and ManagingDirector of Lebtech Berhad (“LEBTECH”) on 7 January 2004. Heholds a Degree in Civil Engineering and also a Degree inEngineering Management from the University of Portland, USA. Hestarted his career with Petronas Berhad in November 1992 asSenior Executive, Tender and Contract Division. He was with thecompany until 1996. Prior to joining the LEBTECH Group, he wasthe General Manager of Putrajaya Holdings Sdn Bhd and alsoserved in various senior positions in several other privatecompanies under Putrajaya Holdings Sdn Bhd. He is the keypersonnel in the management team that runs the day-to-dayoperations of LEBTECH Group. He also sits on the boards of severalother private companies. He does not hold any other directorshipsof public companies. He holds a total of 86,158,800 ordinaryshares (direct and indirect) in LEBTECH and is deemed to have aninterest in the shares of the subsidiary companies to the extent heldby LEBTECH. He is the brother of Dato’ Noor Azman @ Noor Hizambin Mohd Nurdin, a Non-Independent Non-Executive Director andmajor shareholder of LEBTECH, Encik Noorazhar bin MohamedNurdin, a Non-Independent Non-Executive Director and EncikNorazlan bin Mohamad Nordin, a major shareholder of LEBTECHand the brother-in-law to Datin Nor Hayati bt Abd Malik, a majorshareholder of LEBTECH. He is the spouse of Noraida bintiMohamed Khatin, a Director of Bina-Mas Construction &Landscape Sdn Bhd. He does not have any conflict of interest withthe Company except for the recurrent related party transactions ofa revenue or trading nature which are necessary for the day-to-dayoperations of the LEBTECH Group for which he is deemed to beinterested as disclosed in pages 19-20 of this Annual Report. Heattended all the five board meetings held during the financial yearended 31 December 2012.

TAN SRI DATUK ADZMI BIN ABDUL WAHAB

aged 70, Malaysian, was appointed as Independent Non-ExecutiveDirector of LEBTECH on 13 December 2007. He is the Chairmanof the Remuneration Committee and is a member of the AuditCommittee. He holds a Bachelor of Arts (Hons) Degree inEconomics from the University of Malaya and a Master of BusinessAdministration from the University of Southern California, USA. Hewas appointed as the longest serving Managing Director of EdaranOtomobil Nasional Berhad (EON) in November 1992 until May2005. In 2003, he was conferred Malaysia CEO of the Year byAMEX and Business Times. He was first Chairman of the MalaysianFranchise Association from 1994 to 2005. He served the MalaysianAdministrative and Diplomatic Service in various capacities from1967 to 1982 in the following areas: Central Procurement andContract Management in Ministry of Finance, InvestmentPromotion in Pahang Tenggara Development Authority, PublicEnterprise Management in Implementation Coordination Unit(Prime Minister’s Department), Regional Planning in Klang ValleyPlanning Secretariat (Prime Minister’s Department). He was aManager, Corporate Planning Division of HICOM Berhad involvedin development of heavy industries projects from 1982 to 1985.He served PROTON in 1985 to 1992 and his last position inPROTON was Director/Corporate General Manager, Administrationand Finance Division. He has wide experience of over 20 yearsserving as a chairman and director of HICOM, PROTON and EONGroup of Companies involved in automotive (car manufacturing,distribution and component), property development,telecommunication, general trading, life insurance and franchisebusinesses. He currently also sits on the boards of Magna PrimaBerhad, Dataprep Holdings Bhd, and other private companiesinvolved in ICT, property development and construction,manufacturing, automotive and franchise businesses. He is alsothe Advisor to the Malaysian Franchise Association. He does nothold any ordinary shares in LEBTECH. He does not have any familyrelationship with any Director and/or major shareholder ofLEBTECH and has no conflict of interest with LEBTECH. Heattended all the five board meetings held during the financial yearended 31 December 2012.

PROFILE OF THE BOARD OF DIRECTORS


PROFILE OF THE BOARD OF DIRECTORS

DATO’ NOOR AZMAN @ NOOR HIZAM BIN MOHD NURDIN

aged 51, Malaysian, was appointed as Non-Independent Non-Executive Director of LEBTECH on 7 January 2004. Hegraduated with an Honours in Business Management degree fromthe University Kebangsaan Malaysia. He began his career as aCorporate and Retail Banking Executive with MUI Bank Berhad in1985. He left MUI Bank Berhad in 1988 to set up Lebar DaunConstruction Sdn. Bhd.. He also sits on the boards of several otherprivate companies. He does not hold any other directorships ofpublic companies. He holds a total of 86,158,800 ordinary shares(direct and indirect) in LEBTECH and is deemed to have an interestin the shares of the subsidiary companies to the extent held byLEBTECH. He is the spouse of Datin Nor Hayati bt Abd Malik, amajor shareholder of LEBTECH and the brother of Encik Norazmibin Mohamed Nurdin, the Chairman and Managing Director and amajor shareholder of LEBTECH and Encik Noorazhar bin MohamedNurdin, a Non-Independent Non-Executive Director and EncikNorazlan bin Mohamad Nordin, a major shareholder of LEBTECH.He does not have any conflict of interest with the Company exceptfor the recurrent related party transactions of a revenue or tradingnature which are necessary for the day-to-day operations of theLEBTECH Group for which he is deemed to be interested asdisclosed in pages 19-20 of this Annual Report. He attended fourout of five board meetings held during the financial year ended 31December 2012.

HAZLI BIN IBRAHIM

aged 50, Malaysian, was appointed as Independent Non-ExecutiveDirector of LEBTECH on 13 April 2010. He serves as the Chairmanof the Audit Committee and is a member of the Nomination andRemuneration Committees. He holds a Bachelor of Finance withAccounting from the University of East London and a fellow of theAssociation of Chartered Certified Accountants and a Master ofBusiness Administration (Finance) from Cass Business School,London. He started his career in London with several charteredaccountants firms. Upon his return to Malaysia in August 1994, hejoined Aseambankers Malaysia Berhad, an investment bankingarm of Malayan Banking Berhad as Manager of Corporate Finance.Subsequently in November 1996, he moved to Amanah MerchantBank Berhad. He left Amanah Group in September 1998 to joinPengurusan Danaharta Nasional Berhad (“Danaharta”), a nationalasset management company of Malaysia, as the Head of CorporatePlanning, Corporate Services Division. He left Danaharta in October2002 to set up Haz-iq Capital Sdn. Bhd., a consultancy firm,specializing in corporate finance works, where he is currently theManaging Director. He has extensive experience in investmentbanking and capital markets. He currently sits on the boards ofMentiga Corporation Berhad and DutaLand Berhad and severalother private companies. He holds a total of 711,400 ordinaryshares (direct and indirect) in LEBTECH and is deemed to have aninterest in the shares of the subsidiary companies to the extent heldby LEBTECH. He does not have any family relationship with anyDirector and/or major shareholder of LEBTECH and has no conflictof interest with LEBTECH. He attended all the five board meetingsheld during the financial year ended 31 December 2012.

NOORAZHAR BIN MOHAMED NURDIN

aged 38, Malaysian, was appointed as Non-Independent Non-Executive Director of LEBTECH on 29 February 2012. He is amember of the Nomination and Remuneration Committees. Heholds a Diploma in Electrical Engineering (Communication) fromthe University of Technology Malaysia. He started his career withLebar Daun Sdn Bhd as Assistant Engineer in November 1996 andlater became the Deputy Chief Executive Officer (Development)and currently holding the position of Executive Director for LebarDaun Development Sdn Bhd since January 2003. He also sits onthe boards of several other private companies. He does not holdany other directorships of public companies. He holds a total of254,800 ordinary shares in LEBTECH and is deemed to have aninterest in the shares of the subsidiary companies to the extent heldby LEBTECH. He is the brother of Encik Norazmi bin MohamedNurdin, the Chairman and Managing Director and majorshareholder of LEBTECH and the brother of Dato’ Noor Azman @Noor Hizam bin Mohd Nurdin, the Non-Independent Non-Executive Director and major shareholder of LEBTECH andthe brother of Encik Norazlan bin Mohamad Nordin, a majorshareholder of LEBTECH and the brother-in-law to Datin Nor Hayatibt Abd Malik, a major shareholder of LEBTECH. He has no conflictof interest with LEBTECH. He attended all the five board meetingsheld during the financial year ended 31 December 2012.

DATO’ NIK ISMAIL BIN DATO’ NIK YUSOFF

aged 67, Malaysian, was appointed as Independent Non-ExecutiveDirector of LEBTECH on 7 January 2004. He serves as theChairman of the Nomination Committee and is a member of theAudit and Remuneration Committees. He obtained a Diploma inPolice Science from the University Kebangsaan Malaysia. Hebegan his career with the Royal Malaysia Police in 1965, where heserved in numerous senior positions within the Royal MalaysiaPolice such as the Head of Special Branch, Terengganu (1982-1983), Commandant Special Branch Training School (1989-1992),Deputy Director Special Branch 1 (1995-1997), and Chief PoliceOfficer of Terengganu (1997), Kedah (1997-1999), Selangor(1999-2001). He retired from the force as the DeputyCommissioner of Police in 2001. He currently also sits on theboards of Advance Information Marketing Berhad, Scan AssociatesBerhad and several other private companies. He does not hold anyordinary shares in LEBTECH. He does not have any familyrelationship with any Director and/or major shareholder ofLEBTECH and has no conflict of interest with LEBTECH. Heattended all the five board meetings held during the financial yearended 31 December 2012.

On the positive note, the construction sector is projected by thegovernment to expand 11.2% in theeconomic growth in2013.


DEAR VALUED SHAREHOLDERS,

I AM PLEASED TO PRESENT HEREWITH THE

ANNUAL REPORT 2012 AND THE AUDITED

FINANCIAL STATEMENTS OF LEBTECH BERHAD

FOR THE FINANCIAL YEAR ENDED

31 DECEMBER 2012. CHAIRMAN’S STATEMENT


CHAIRMAN’SSTATEMENT

REVIEW OF THE FINANCIAL YEARENDED 31 DECEMBER 2012

The Malaysian economy is clearly on trackto achieve high income and advancednation status by 2020. Real GDP grew5.6% in 2012, surpassed consensusforecasts of a little over 5.0% and theTreasury's 2013 Budget forecast ofbetween 4.5 - 5.0%. The 2012 growth wasdriven by continuing strong domesticdemand, with impressive annual growth inboth private consumption and private andpublic investment outlays. The constructionsector, which is benefitting from the on-going implementation of infrastructureprojects, expanded strongly at 15.5%. Onthe positive note, the construction sector isprojected by the government to expand11.2% in the economic growth in 2013.

FINANCIAL PERFORMANCE

The financial year ended 31 December 2012 saw theGroup registered a profit before taxation of RM6.924million as compared with RM2.485 million achieved inthe last financial year. However, turnover decreased fromRM76.461 million last year to RM53.372 million thisyear. The decrease in revenue was mainly due to theslower progress at site of several construction contractsundertaken by the Group.

There was no movement in the Company’s issued andpaid-up share capital during the year under review. Asat 31 December 2012, the Company’s issued and paid-up share capital remained at RM68.242 million withshareholders’ fund and net asset per share increasedmarginally to RM114.189 million and RM0.837, fromRM106.586 million and RM0.782 a year before,respectively.



REVIEW OF OPERATION

Despite the high competition in the sector,the Group showed perseverance andresilient where it managed to produce a setof positive financial results for 2012. Theconstruction of two (2) Selangor SyariahLower Courts has been completed and thenext four (4) other Syariah Lower Courts areexpected to be completed in 2013.

The year under review also saw the Groupcontinued with the construction of privateresidential homes with the launches of newphases in D’Kayangan and BukitBandaraya Shah Alam and other residentialproperty development projects.

DIVIDEND

The Board has decided to place utmostpriority in keeping positive cash flow andcash conservation, and thus has proposedthat no dividend be paid for financial yearended 31 December 2012.

PROSPECT

The Group will focus on securing moreconstruction jobs in 2013 to increase itsrevenue and building a strong order book.To achieve this, the Group will be moreactive in its bidding for construction jobs inthe public as well as in the private sectors.



On private residential projects, the Groupexpects the sector will still be challengingin 2013 compared with last year. This ismainly due to a very competitive marketconditions in the construction industry.

Going forward, the Group will remaincautious in view of the uncertainties and willcontinue to focus on cost control measuresand to increase productivity to meet thechallenges ahead. On this basis, weanticipate the Group’s performance in 2013will improve from that of 2012.

ACKNOWLEDGEMENT

I wish to thank the management and stafffor their dedication, contributions, loyaltyand trust over the years to ensure thecontinued growth and success of theGroup. Further, I would like to extend mysincere appreciation to all our bankers,clients, suppliers and business associatesfor the support and confidence. I would alsolike to express my utmost appreciation tomy fellow board members for their valuablecontribution and commitment. Last but notleast, my sincere gratitude to allshareholders for the continued support tothe Group.

Thank you.

NORAZMI BIN MOHAMED NURDINChairman/Managing Director

CORPORATESOCIAL RESPONSIBILITY


The Board of Directors of Lebtech Berhad recognises the importance of practising the Corporate Social Responsibility (CSR) as it will bringvalue to the Company’s business operations and at the same time, deliver sustainable value to the society at large.

Lebtech Berhad and its subsidiaries (“LEBTECH Group”) is committed to undertake its CSR practices, with the belief that these initiativeswill have positive impact on the Environment, Workplace, Community and Marketplace.

The CSR initiatives undertaken by the Group are summarised below:-

ENVIRONMENT

The nature of our business activities has a major impact on the environment in which we operate. We have taken many steps to mitigateor minimise adverse impacts arising from our construction activities, including water sprinkling to reduce dust pollution, controlled openburning and proper handling of waste and construction debris to reduce air pollution and adoption of proper piling methods to mitigatenoise pollution. We will continue to adhere to the environmental standards set by the local authorities at our construction sites. In addition,we have implemented the recycling of office stationery and used papers and promoted good practices on energy saving at our corporateoffice.

WORKPLACE

We are committed to provide a safe and healthy working environment for our employees. Construction workers are provided with safetyequipment and are briefed on working procedures in relation to the health and safety matters. Briefings on safety matters are conductedregularly to instill safety consciousness in the staff and workers as to enhance safety and health in the working environment as well asto reduce and avoid any incident or accident at the workplace.

We always believe a healthy mind starts with a healthy body. LEBTECH Sport Club has organised various sporting and fitness activitieslike badminton matches and indoor games tournament to promote healthy lifestyle for the staff. In addition, efforts were also made topromote staff interaction and to instill a sense of belonging amongst the staff by holding Family Day and celebrating staffs’ birthday.

COMMUNITY

LEBTECH Group has undertaken some CSR initiatives to support the community. LEBTECH Group has encouraged its employees tosupport and participate in some community activities such as organising Majlis Berbuka Puasa Bersama Dengan Anak-anak Yatim aswell as has offered Industrial Training Programmes for University pre-graduates. Besides, LEBTECH Group has contributed monetarydonations to the charitable organisations from time to time.

MARKETPLACE

At the marketplace, we always endeavor to deliver good quality products to our clients and have thus focused on the quality managementsystem of our operations.

STATEMENT ONCORPORATE GOVERNANCE


The Board of Directors of Lebtech Berhad (“the Board”) recognises the importance of practising the highest standards of corporategovernance throughout the Company and its subsidiaries (“the Group”) and fully supports the recommendations of the Malaysian Codeon Corporate Governance (“the Code”). The Board constantly strives to ensure that the highest standards of corporate governance arepractised throughout the Group to protect and enhance shareholders’ value and the financial performance of the Group as a part of itsfiduciary duties.

The Board is pleased to report on the manner the Group has applied the principles and the extent of compliance with the best practicesof the Code throughout the financial year ended 31 December 2012.

THE BOARD OF DIRECTORS

Board Composition, Duties and Responsibilities

The Board currently has six members, comprising the Chairman/Managing Director, three Independent Non-Executive Directors and twoNon-Independent Non-Executive Directors. With this composition, the Board satisfies the requirement of having at least one third of itsmembers as Independent Directors. All the Independent Directors are independent of the Management and are free from any businessor other relationship that would materially interfere with the exercise of their independent judgment. The Board is of the view that threeIndependent Directors fairly reflect the interests in the Company by the minority shareholders. The Directors, with their differentbackground and specialisation, collectively bring with them a wide range of experience and expertise to enable the Board in dischargingits duties and responsibilities effectively. A brief description on the background of the Directors is presented on pages 6 and 7 of thisAnnual Report.

The Board has overall responsibility for corporate governance, strategic direction, formulation of policies and overseeing the resources,investments and businesses of the Group. All Board members participate fully in major decisions and key issues involving the Group suchas approval of quarterly and annual results, budgets, significant acquisitions and disposals of assets, major capital expenditure as wellas long term strategic planning for the Group.

The roles of the Chairman and Managing Director are combined and currently held by Encik Norazmi bin Mohamed Nurdin. This isperceived as appropriate and in the best interest of the Group as he has extensive knowledge and experience in the Group’s businesses,policies and administrative matters and is able to lend a hands-on approach in managing the Group. The Board is mindful of the dualrole held by him but is of the opinion that the current Board composition reflects a strong independent element so that no individual hasunfettered power of decision and no small group of individuals dominates the Board decision making.

The Board has identified Dato’ Nik Ismail bin Dato’ Nik Yusoff as the Senior Independent Non-Executive Director to whom all concernsregarding the Company may be conveyed.

Board Meetings and Supply of Information

The Board meets on a scheduled basis at least four times a year, with additional meetings convened when necessary. During the financialyear, five Board meetings were held and the details of attendance of each Director at the Board meetings are recorded within the Profileof the Board of Directors on pages 6 and 7 of this Annual Report.

Prior to each Board meeting, all Directors are provided with a set of board papers with details on matters to be discussed at the meeting.

All members of the Board have unrestricted access to the advice and services of the senior managers and the company secretary. Thecompany secretary is responsible for ensuring that all Board meeting procedures are followed and that all applicable rules and regulationsare complied with.

Directors may obtain independent professional advice in furtherance of their duties, at the Company’s expense.

Appointment to the Board

In order to comply with good practice for the appointment of new directors through a formal and transparent procedure, the Board hasset up a Nomination Committee, which comprised exclusively of Non-Executive Directors, to evaluate and recommend candidates fordirectorships to the Board.

Re-election of Directors

In accordance with the Company’s Articles of Association, one-third of the Directors for the time being, or, if their number is not three,or a multiple of three, then the number nearest to one-third shall retire from office and be eligible for re-election Provided Always that allDirectors including a Managing Director shall retire from office once at least in each three years but shall be eligible for re-election. Aretiring Director shall retain office until the close of the Annual General Meeting at which he retires.

The Articles of Association also provide that any Director who is appointed from time to time shall hold office only until the next AnnualGeneral Meeting of the Company, and shall then be eligible for re-election but shall not be taken into account in determining the Directorswho are to retire by rotation at that meeting.

Directors’ Training

At present, the Company does not have a formal orientation programme for the newly appointed Directors. However, newly appointedDirectors will be provided with relevant information pertaining to the Group, including visits to the Group’s operating sites and meetingswith senior management to facilitate their understanding of the nature of business and strategy of the Group.

In line with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board will continue to evaluate and determinethe training needs of its Directors from time to time to enhance their skills and knowledge so as to enable them to discharge their dutiesas Directors more effectively.

During the financial year, the Directors have not attended any training programmes due to busy business schedules. However, theDirectors have been briefed and updated by the company secretary and the senior management on relevant new regulations and statutoryrequirements during the Audit Committee and Board meetings.

BOARD COMMITTEES

The Board, in discharging its fiduciary duties, is assisted by the following Board Committees, each entrusted with specific tasks andoperate within clearly defined terms of reference.

Audit Committee

The Audit Committee was established on 14 January 2004. It presently comprises of three Independent Non-Executive Directors. TheAudit Committee Report is set out on pages 21 to 24 of this Annual Report.

Nomination Committee

The Nomination Committee was established on 12 May 2004 and comprises of the following members:-

ChairmanDato’ Nik Ismail bin Dato’ Nik Yusoff (Independent Non-Executive Director)

MembersHazli bin Ibrahim (Independent Non-Executive Director)Noorazhar Bin Mohamed Nurdin (Non-Independent Non-Executive Director)

The Nomination Committee is responsible for making recommendations to the Board on all new Board and Board Committeesappointment. The Nomination Committee will also review the required mix of skills and experience of the directors of the Board indetermining the appropriate Board balance and size of non-executive participation.

Remuneration Committee

The Remuneration Committee was established on 12 May 2004 and comprises of the following members:-

ChairmanTan Sri Datuk Adzmi Bin Abdul Wahab (Independent Non-Executive Director)

STATEMENT ONCORPORATE GOVERNANCE(CONTINUED)


MembersDato’ Nik Ismail bin Dato’ Nik Yusoff (Independent Non-Executive Director)Hazli bin Ibrahim (Independent Non-Executive Director) Noorazhar Bin Mohamed Nurdin (Non-Independent Non-Executive Director)

The Remuneration Committee is responsible for making recommendations to the Board on the remuneration packages of ExecutiveChairman, Managing Director and Executive Directors of the Company in all its forms, drawing from outside advice as necessary. Thedetermination of remuneration packages of Non-Executive Directors is the responsibility of the Board as a whole. Individual directors willabstain from deliberations and voting on decisions in respect of their own remuneration package.

DIRECTORS’ REMUNERATION

The objective of the Company’s policy on Directors’ remuneration is to attract and retain experienced and capable Directors to run theGroup successfully. In the case of Executive Directors, the component parts of the remuneration are structured so as to link rewards tocorporate and individual performance. In the case of Non-Executive Directors, the level of remuneration reflects the experience and levelof responsibilities undertaken by the particular Non-Executive Director concerned.

The Directors’ remuneration paid or payable to all the Directors of the Company for the financial year ended 31 December 2012 are asfollows:-

Fees Salaries TotalRM RM RM

Executive Director - 234,000 234,000Non-Executive Directors 150,000 - 150,000

Total 150,000 234,000 384,000

The number of Directors of the Company whose total remuneration falls within the following bands are as follows:-

Range of Remuneration Executive Non-Executive

Less than RM50,000 - 5RM50,001 to RM100,000 - -RM100,001 to RM150,000 - -RM150,001 to RM200,000 - -RM200,001 to RM250,000 1 -

There is only one Executive Director whose remuneration details have been disclosed as above. The Board is of the view that it’s notnecessary to give break-up of remuneration of Non-Executive Directors, which is not considered significant.

SHAREHOLDERS

The Board acknowledges the need for shareholders to be informed on all material business matters affecting the Group. In addition tothe various announcements made, the timely release of financial results on a quarterly basis provides shareholders and the investingpublic with an overview of the Group’s performance and operations.

In addition, the Board encourages full participation by shareholders at every Annual General Meeting and Extraordinary General Meetingof the Company and opportunity is given to the shareholders to make relevant enquiries and seek clarification on the Group’s businessactivities and financial performance.



ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board aims to provide and present a balanced and meaningful assessment of the Group’s financial performance and prospect atthe end of the financial year, primarily through the annual financial statements and quarterly announcement of results to the shareholdersas well as the Chairman’s Statement in the Annual Report. The Board is assisted by the Audit Committee to oversee the Group’s financialreporting processes and the quality of its financial reporting.

Directors’ Responsibility Statement in respect of the Audited Financial Statements

The Directors are required by the Companies Act, 1965 (“the Act”) to prepare financial statements for each financial year which give atrue and fair view of the state of affairs of the Group and of the Company as at the end of the financial year and of the results of theoperations, changes in equity and the cash flows of the Group and of the Company for the financial year then ended.

In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies and madereasonable and prudent judgments and estimates. The Directors also have a general responsibility for taking such steps to safeguard theassets of the Group and to prevent and detect fraud and irregularities.

The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financialposition of the Group and of the Company, and ensuring that the financial statements comply with the Act and the applicable approvedFinancial Reporting Standards in Malaysia.

Internal Control

The Statement on Internal Control is set out on page 25 of this Annual Report.

Relationship with Auditors

The Group has established and maintained an appropriate and transparent relationship with the Group’s auditors, both internal andexternal, particularly in seeking their professional advice and towards ensuring compliance with the accounting standards in Malaysia.

COMPLIANCE WITH BEST PRACTICES IN CORPORATE GOVERNANCE

The Board is of the opinion that the Group has principally complied with the Best Practices in Corporate Governance as set out in theCode throughout the financial year 2012 save as explained above.

ADDITIONAL COMPLIANCE INFORMATION

Pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the following additional information isprovided:-

Utilisation of Proceeds

The Company did not raise any funds through any corporate proposals during the financial year.

Share Buybacks

The Company did not have a share buyback programme in place during the financial year.

Options, Warrants or Convertible Securities

The Company did not issue any options, warrants or convertible securities during the financial year.



Depository Receipt Programme

The Company did not sponsor any Depository Receipt Programme during the financial year.

Imposition of Sanctions/Penalties

There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevantregulatory bodies during the financial year.

Non-Audit Fees

There were no non-audit fees paid to the external auditors by the Company during the financial year.

Variation in Results

The Company did not issue any profit estimates, forecasts or projections for the financial year and there was no material variance betweenthe audited results for the financial year and the unaudited results previously announced.

Profit Guarantees

There were no profit guarantees given by the Company during the financial year.

Material Contracts

There were no material contracts entered into by the Company and/or its subsidiaries involving the Directors’ and major shareholders’interests, either still subsisting at the end of the financial year or entered into since the end of the previous financial year except for thoserecurrent related party transactions of a revenue or trading nature entered into for which shareholders’ mandate had been secured.

Revaluation of Landed Properties

The Company did not have any revaluation policy on landed properties during the financial year.

Recurrent Related Party Transactions of a Revenue or Trading Nature

The aggregate value of the Recurrent Related Party Transactions of a revenue or trading nature conducted pursuant to the shareholders’mandate during the financial year under review between the Company and/or its subsidiary companies with related parties are set outbelow:

Transaction Valuefor the Financial Year

Ended 31 December 2012Nature of Transactions Interested Related Party RM

Construction works awarded to Norazmi bin Mohamed Nurdin(1) NilLebtech Construction Sdn Bhd Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin(2)

(LCSB) by Lebar Daun Development Noorazhar bin Mohamed Nurdin(3)

Sdn Bhd (LDDSB) Datin Nor Hayati bt Abd Malik(4)

Letting of office premises to Norazmi bin Mohamed Nurdin(1) 175,000LDDSB by LCSB Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin(2)

Noorazhar bin Mohamed Nurdin(3)

Datin Nor Hayati bt Abd Malik(4)

Letting of office equipment and Norazmi bin Mohamed Nurdin(1) 46,250furniture to LDDSB by LCSB Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin(2)


Datin Nor Hayati bt Abd Malik(4)



Transaction Valuefor the Financial Year

Ended 31 December 2012Nature of Transactions Interested Related Party RM

Construction works awarded to Norazmi bin Mohamed Nurdin(1) 54,829,556LCSB by Basco Sdn Bhd (BASCO) Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin(2)


Norazlan bin Mohamad Nordin(5)

Fatmawati bt Kasbin(6)

Construction works awarded to Norazmi bin Mohamed Nurdin(1) NilBASCO by LCSB Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin(2)


Norazlan bin Mohamad Nordin(5)

Fatmawati bt Kasbin(6)

Construction works awarded to Norazmi bin Mohamed Nurdin(1) NilLCSB by BMCLSB Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin(2)


Noraida binti Mohamed Khatin(7)

Notes:-

(1) Norazmi bin Mohamed Nurdin is the Chairman/Managing Director and a major shareholder of Lebtech Berhad (LEBTECH) and aDirector of LCSB (a wholly-owned subsidiary of LEBTECH) and LDDSB. He is the brother of Dato’ Noor Azman @ Noor Hizam binMohd Nurdin, Noorazhar bin Mohamed Nurdin and Norazlan bin Mohamad Nordin and the brother-in-law to Datin Nor Hayati btAbd Malik and Fatmawati bt Kasbin.

(2) Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin is a Non-Independent Non-Executive Director and major shareholder ofLEBTECH and a Director of LCSB. He is also a Director and major shareholder of LDDSB. He is the spouse of Datin Nor Hayati btAbd Malik and the brother of Norazmi bin Mohamed Nurdin, Noorazhar bin Mohamed Nurdin and Norazlan bin Mohamad Nordinand the brother-in-law to Fatmawati bt Kasbin.

(3) Noorazhar bin Mohamed Nurdin is a Director of LCSB and LDDSB. He is the brother of Norazmi bin Mohamed Nurdin, Dato’ NoorAzman @ Noor Hizam bin Mohd Nurdin and Norazlan bin Mohamad Nordin and the brother-in-law to Datin Nor Hayati bt Abd Malikand Fatmawati bt Kasbin.

(4) Datin Nor Hayati bt Abd Malik is a major shareholder of LEBTECH. She is also a Director and deemed major shareholder of LDDSB.She is the spouse of Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin and the sister-in-law to Norazmi bin Mohamed Nurdin,Noorazhar bin Mohamed Nurdin, Norazlan bin Mohamad Nordin and Fatmawati bt Kasbin.

(5) Norazlan bin Mohamad Nordin is a major shareholder of LEBTECH. He is also a Director and major shareholder of BASCO. He isthe spouse of Fatmawati bt Kasbin and the brother of Norazmi bin Mohamed Nurdin, Dato’ Noor Azman @ Noor Hizam bin MohdNurdin and Noorazhar bin Mohamed Nurdin and the brother-in-law to Datin Nor Hayati bt Abd Malik.

(6) Fatmawati bt Kasbin is a Director and deemed major shareholder of BASCO. She is the spouse of Norazlan bin Mohamad Nordinand the sister-in-law to Norazmi bin Mohamed Nurdin, Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin, Noorazhar binMohamed Nurdin and Datin Nor Hayati bt Abd Malik.

(7) Noraida binti Mohamed Khatin is a Director of BMCLSB. She is the spouse of Norazmi bin Mohamed Nurdin and the sister-in-lawto Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin and Noorazhar bin Mohamed Nurdin.



MEMBERS OF THE AUDIT COMMITTEE

The Audit Committee presently comprises the following members:-

Chairman

Hazli Bin Ibrahim (Independent Non-Executive Director)

Members

Tan Sri Datuk Adzmi Bin Abdul Wahab (Independent Non-Executive Director)Dato’ Nik Ismail Bin Dato’ Nik Yusoff (Independent Non-Executive Director)

TERMS OF REFERENCE

1. Objectives

The objective of the Audit Committee is to assist the Board of Directors in meeting its responsibilities relating to accounting andreporting practices of the Company and its subsidiary companies. In addition, the Audit Committee shall:-

a) oversee and appraise the quality of the audits conducted both by the Company’s internal and external auditors;

b) maintain open lines of communication between the Board of Directors, the internal auditors and the external auditors for theexchange of views and information, as well as to confirm their respective authority and responsibilities; and

c) determine the adequacy of the Group’s administrative, operating and accounting controls.

2. Membership

The Audit Committee shall be appointed by the Board of Directors from among their number, which fulfils the following requirements:-

a) the Audit Committee must be composed of no fewer than three (3) members;

b) all the Audit Committee members must be non-executive directors, with a majority of them being independent directors; and

c) at least one (1) member of the Audit Committee:-

i) must be a member of the Malaysian Institute of Accountants; or

ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ working experienceand:-• he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act, 1967; or• he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the

Accountants Act, 1967; or

iii) fulfils such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad.

No alternate director shall be appointed as a member of the Audit Committee.

The members of the Audit Committee shall elect a Chairman from among their number who shall be an independent director.

In the event of any vacancy in the Audit Committee resulting in the non-compliance of item 2 (a) to (c) above, the vacancy must befilled within three (3) months of that event.

The Board of Directors must review the term of office and performance of the Audit Committee and each of its members at leastonce every three (3) years to determine whether the Audit Committee and members have carried out their duties in accordance withthe terms of reference.

AUDIT COMMITTEE REPORT


3. Functions

The functions of the Audit Committee are as follows:-

a) To review the following and report the same to the Board of Directors:-

i) with the external auditor, the audit plan;ii) with the external auditor, his evaluation of the system of internal controls;iii) with the external auditor, his audit report;iv) the assistance given by the Company’s employees to the external auditor; andv) any related party transaction and conflict of interest situation that may arise within the Company or Group including any

transaction, procedure or course of conduct that raises questions of management integrity;

b) To consider the appointment of the external auditors, the audit fee and any questions of resignation or dismissal includingrecommending the nomination of a person or persons as external auditors;

c) To discuss with the external auditor before the audit commences, the nature and scope of the audit, and ensure co-ordinationwhere more than one audit firm is involved;

d) To review the quarterly results and year-end financial statements before recommending for the Board of Directors’ approval,focusing particularly on:-

• any changes in accounting policies and practices;• significant adjustments arising from the audit;• the going concern assumption; and• compliance with accounting standards and other legal requirements;

e) To discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss(in the absence of management where necessary);

f) To review the external auditors’ management letter and management’s response;

g) In relation to Internal Audit function:-

• Review the adequacy of the scope, functions, competency and resources of the internal audit function, and that it has thenecessary authority to carry out its work;

• Review the internal audit programme and results of the internal audit process and where necessary, ensure that appropriateaction is taken on the recommendations of the internal audit function;

• Review any appraisal or assessment of the performance of members of the internal audit function;• Approve any appointments or termination of senior staff members of the internal audit function;• Inform itself of resignations of internal audit staff members and provide the resigning staff members an opportunity to

submit his reasons for resigning;• Review and assess the adequacy of the risk management framework and risk assessment.

h) To consider the major findings of internal investigations and management’s response;

i) To report to the Bursa Malaysia Securities Berhad matters which have not been satisfactorily resolved by the Board of Directorsresulting in a breach of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad; and

j) To consider other areas as defined by the Board of Directors.

4. Authority

The Audit Committee shall, whenever necessary and reasonable for the Company to perform its duties, in accordance with aprocedure to be determined by the Board of Directors and at the cost of the Company:-

a) have authority to investigate any matter within its terms of reference;b) have the resources which are required to perform its duties;

AUDIT COMMITTEE REPORT(CONTINUED)


c) have full and unrestricted access to any information pertaining to the Company;d) have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;e) be able to obtain independent professional or other advice; andf) be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors

and employees of the Company, whenever deemed necessary.

5. Meetings

The Audit Committee shall meet at least four (4) times a year and shall hold such additional meetings as the Chairman shall decidein order to fulfil its duties.

In addition, the Chairman may call a meeting of the Audit Committee if a request is made by any committee member or the internalor external auditors.

A resolution in writing, signed by all the committee members shall be as valid and effective as if it had been deliberated and decidedupon at a meeting of the Audit Committee.

Unless otherwise determined by the Audit Committee from time to time, a seven (7) days’ notice of all Audit Committee’s meetingsshall be given to all the committee members either personally or by electronic or by facsimile transmission.

The Head of Internal Audit Department shall be expected to attend all meetings of the Audit Committee.

The Audit Committee may invite other directors and employees of the Company and of the Group, the external auditors or any otherperson to be in attendance to assist it in its deliberations. However, at least twice a year the Audit Committee shall meet with theexternal auditors without executive board members present.

A quorum shall consist of a majority of independent directors and shall not be less than two (2).

If at any meeting the Chairman is not present within fifteen (15) minutes after the time appointed for holding the meeting, thecommittee members present shall elect a Chairman from among the independent directors.

Any questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the Chairman shallhave a second or casting vote except where the quorum is made up of only two (2) members or where only two (2) members arecompetent to vote on the question at issue.

The Company Secretary shall act as secretary of the Audit Committee and shall be responsible, in conjunction with the Chairman,for drawing up the agenda and circulating it in a timely manner, supported by explanatory documentation to committee membersprior to each meeting.

The secretary shall also be responsible for keeping the minutes of meetings of the Audit Committee, and circulating them tocommittee members and to the other members of the Board of Directors.

MEETINGS

During the financial year ended 31 December 2012, five (5) Audit Committee Meetings were held and the details of attendance of eachAudit Committee member are as follows:-

Audit Committee Members No. of Meetings Attended

Hazli Bin Ibrahim 5/5Tan Sri Datuk Adzmi Bin Abdul Wahab 5/5Dato’ Nik Ismail Bin Dato’ Nik Yusoff 5/5



SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR

The Audit Committee has discharged its duties as set out in its Terms of Reference, which accompany this Report. During the year underreview, the following were the activities of the Audit Committee:-

i) Reviewed, discussed and approved the audit plans for the year for the Group and the Company presented by the internal auditor.

ii) Reviewed the adequacy of the scope, functions and staffing requirements of Group’s Internal Audit Department to ensure that it wasadequately staffed by employees with the relevant skills, knowledge and experience to enable the Group’s Internal Audit Departmentto perform its role and that it has the necessary authority to carry out its work.

iii) Reviewed the internal audit reports. The Audit Committee was briefed on the audit reports issued and on the issues raised by theInternal Auditor on various aspects of the system in operation, practices and procedures and internal controls. Special notice wastaken of significant issues raised in the audit reports and that adequate corrective actions have been taken by the OperatingManagement to rectify the weaknesses.

iv) Reviewed the external auditors’ scope of work and audit plan of the year.

v) Reviewed the quarterly results and year-end financial statements prior to the approval by the Board of Directors focusing particularlyon:-

- changes in or implementation of major accounting policy changes;- significant and unusual events; and- compliance with accounting standards and other legal requirements.

vi) Reviewed the related party transactions and conflict of interest situation that may arise within the Group including any transactions,procedure or course of conduct that raises questions of Management integrity.

vii) Commissioned special reviews on specific areas of operations.

INTERNAL AUDIT FUNCTION

The Group had an Internal Audit Department which is independent of the activities or operations of the Group and which provides theAudit Committee and the Board with much of the assurance it requires regarding the adequacy and integrity of the internal control.

Its principal responsibility is to undertake regular and systematic review of the system of internal control so as to provide a reasonableassurance that such system operates satisfactorily and effectively in the Group and report to the Audit Committee on a quarterly basis.Internal audit strategy and a detailed Audit Plan are presented to the Audit Committee for approval. The internal audit function adopts arisk-based approach in preparing its audit strategy and plan. The internal audit strategy and plan is developed based on the riskassessment of the Group. The Board ensures that appropriate management responses are given to any key audit findings and the relevantcorrective and/or preventive actions are undertaken.

The Board, together with the Internal Audit Department and the Management, are taking the necessary measures for the continuousimprovement of the internal control environment.

During the financial year, the total cost incurred for the internal audit function is RM40,650.



INTRODUCTION

The Malaysian Code on Corporate Governance sets out the principle that the Board of Directors of listed companies should maintain asound system of internal control to safeguard shareholders’ investment and the Group’s assets. Paragraph 15.26(b) of the Main MarketListing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) requires the Board of Directors of listed companies toinclude a statement on internal control in its annual report.

RESPONSIBILITY

The Board of Directors of the Company recognises the importance of a sound system of internal control as part of good corporategovernance within the Group. The Board affirms its overall responsibility for the Group’s system of internal control and for the review ofits adequacy and integrity. The Group has developed an internal control system with on-going processes to:-

• Identify, evaluate, monitor and manage significant risk affecting achievement of the Group’s business objectives; and

• Review the adequacy and integrity of the Group’s system of internal control itself.

However, such a system is designed to manage risk rather than to eliminate risk of failure to achieve the policies and business objectivesof the Group. It can only provide reasonable assurance, but not absolute assurance, against material misstatement of management andfinancial information and records or against financial losses or fraud.

The Board is of the view that the system of internal control in place for the year under review and up to the date of issuance of the annualreport and financial statements is sound and sufficient based on the review performed by the internal audit department to safeguard theshareholders’ investment, the interests of customers, regulators and employees and the Group’s assets.

The management assists the Board in the implementation of the Board’s policies and procedures on risk and control by identifying andassessing the risks faced, and in the design, operation and monitoring of suitable internal controls to mitigate and control these risks.

RISK MANAGEMENT FRAMEWORK

The Group’s identification and review of risks are carried out during Head of Departments (HOD) meetings as an on-going process. TheGroup updates as required the status of its risk profile in the process of identifying, evaluating and managing the significant risks facedby the Group. The topics that were discussed include project management, procurement process & procedure, contract review, safety& health compliance, admin & human resource activities, and fixed assets management.

The other key elements of the Group’s system of internal control are as follows:-

• There is an organisation structure, which formally defines and entrench lines of responsibility and delegation of authority to ensureproper identification of accountabilities and segregation of duties.

• Key functions such as finance, tax and treasury, corporate and legal matters, human resource and administration, informationtechnology are controlled centrally.

• HOD meetings were held five (5) times during the year to review and oversee the Group’s financial performance, businessdevelopment, management and corporate issues.

• The Group produces consolidated quarterly performances, which allow the management to focus on areas of concern from the datacaptured in the financial system.

• The Audit Committee examines the effectiveness of the Group’s systems of internal control on behalf of the Board. This isaccomplished through review of the internal audit department’s work. The internal audit department independently reviews the riskidentification procedures and control processes implemented by the management and reports to the Audit Committee quarterly.Internal audit department also reviews the internal controls in the key activities of the Group’s business and functional units inaccordance with the audit plan approved by the Audit Committee and the Board.

• An Employee Handbook clearly emphasises ethical behaviour and working environment to enhance positive corporate values.

• Surprise visits to project sites by the Managing Director and senior management on an ad-hoc basis.

The Board is cognisant of the importance of maintaining appropriate controls and will continue to review the adequacy and integrity ofthe Group’s system of internal control.

STATEMENT ON INTERNAL CONTROL


DIRECTORS’ REPORT

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the yearended 31 December 2012.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in note 8 to thefinancial statements. There has been no significant change in the nature of these activities during the financial year.

FINANCIAL RESULTS

Group CompanyRM RM

Profit/(Loss) for the year 4,766,476 (240,721)

Profit/(Loss) attributable to:Owners of the Company 4,766,476 (240,721)

RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the financial year except as disclosed in the financialstatements.

DIVIDENDS

No dividend was paid during the year and the Directors do not recommend any dividend to be paid for the financial year.

DIRECTORS OF THE COMPANY

Directors who served since the date of the last report are:

Norazmi bin Mohamed NurdinTan Sri Datuk Adzmi bin Abdul WahabDato’ Nik Ismail bin Dato’ Nik YusoffDato’ Noor Azman @ Noor Hizam bin Mohd NurdinHazli bin Ibrahim Noorazhar bin Mohamed Nurdin

DIRECTORS’REPORT


DIRECTORS’ INTERESTS

The interest and deemed interest in the ordinary shares of the Company and of its related corporations (other than wholly-ownedsubsidiaries) of those who were Directors at year end (including the interests of the spouses or children of the Directors who themselvesare not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM1 eachAt At

1.1.2012 Bought Sold 31.12.2012

Shareholdings in which Directors have direct interestNorazmi bin Mohamed Nurdin 8,082,000 - 3,066,000 5,016,000Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin 59,751,000 3,066,000 - 62,817,000Hazli bin Ibrahim 554,400 - - 554,400Noorazhar bin Mohamed Nurdin 254,800 - - 254,800

Shareholdings in which Directors have deemed interestsNorazmi bin Mohamed Nurdin 78,076,800 3,066,000 - 81,142,800Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin 26,407,800 - 3,066,000 23,341,800Hazli bin Ibrahim 157,000 - - 157,000

By virtue of their interests in the shares of the Company, Norazmi bin Mohamed Nurdin and Dato’ Noor Azman @ Noor Hizam bin MohdNurdin and Hazli bin Ibrahim are also deemed interested in the shares of the subsidiaries during the financial year to the extent thatLebtech Berhad has an interest.

None of the other Directors holding office at 31 December 2012 had any interest in the ordinary shares of the Company and of its relatedcorporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (otherthan a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financialstatements or the fixed salary of a full time employee of the Company) by reason of a contract made by the Company or a relatedcorporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantialfinancial interest except as disclosed in Note 27 to the financial statements.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company toacquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

ISSUE OF SHARES AND DEBENTURES

There were no changes in the issued and paid-up capital of the Company during the financial year.

OTHER STATUTORY INFORMATION

Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out,the Directors took reasonable steps to ascertain that:

i) all known bad debts have been written off and adequate provision made for doubtful debts, and

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount whichthey might be expected to realise.

DIRECTORS’REPORT(CONTINUED)


DIRECTORS’REPORT(CONTINUED)


OTHER STATUTORY INFORMATION (CONTINUED)

At the date of this report, the Directors are not aware of any circumstances:

i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the Group and in theCompany inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the Group and in the Company financial statements misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Companymisleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statementsof the Group and of the Company misleading.

At the date of this report, there does not exist:

i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures theliabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable withinthe period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect theability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 31 December2012 were not substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transactionor event occurred in the interval between the end of that financial year and the date of this report.

AUDITORS

The auditors, Messrs Afrizan Tarmili Khairul Azhar, have indicated their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors,

.......................................................................NORAZMI BIN MOHAMED NURDIN

.......................................................................DATO’ NIK ISMAIL BIN DATO’ NIK YUSOFF

Shah Alam, Malaysia

Date: 25 April 2013

STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965


We, NORAZMI BIN MOHAMED NURDIN and DATO’ NIK ISMAIL BIN DATO’ NIK YUSOFF being two of the Directors of LEBTECHBERHAD, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 33 to 73 are drawn up inaccordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2012 and oftheir financial performance and cash flows for the year then ended.

The supplementary information set out in Note 29 to the financial statements on page 73 have been prepared in accordance with theGuidance of Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant toBursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on theformat prescribed by Bursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors,

.......................................................................NORAZMI BIN MOHAMED NURDIN

.......................................................................DATO’ NIK ISMAIL BIN DATO’ NIK YUSOFF

Shah Alam, Selangor

Date: 25 April 2013

STATUTORY DECLARATIONPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965


I, OSMAN BIN MD KASSIM, the officer primarily responsible for the financial management of Lebtech Berhad, do solemnly and sincerelydeclare that the financial statements set out on pages 33 to 72 and supplementary information set out on page 73 are, to the best of myknowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of theprovisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared }by the above named OSMAN BIN }MD KASSIM at Shah Alam }in Selangor on 25 April 2013 } OSMAN BIN MD KASSIM

Before me:

Commisioner for Oaths

Shah Alam, Malaysia

Report on the Financial Statements

We have audited the financial statements of Lebtech Berhad, which comprise the statements of financial position as at 31 December2012 of the Group and of the Company, and the statements of comprehensive income, changes in equity and cash flows of the Groupand of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as setout on pages 33 to 72.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance withMalaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia, andfor such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free frommaterial misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance withapproved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. Theprocedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements,whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation offinancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluatingthe overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31December 2012 and of their financial performance and cash flows for the year then ended in according with Malaysian Financial ReportingStandards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiarieshave been properly kept in accordance with the provisions of the Act.

(b) we are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statementsare in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and wehave received satisfactory information and explanations required by us for those purposes.

(c) the audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made underSection 174(3) of the Act.

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF LEBTECH BERHAD


Other Reporting Responsibilities

The supplementary information set out in Note 29 to the financial statements on page 73 is disclosed to meet the requirement of BursaMalaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of thesupplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits orLosses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirement, as issued by the MalaysianInstitute of Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementaryinformation is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia SecuritiesBerhad.

Other Matters

1. As stated in Note 3 to the financial statements, Lebtech Berhad adopted Malaysian Financial Reporting Standards on 1 January 2012with a transition date of 1 January 2011. These standards were applied retrospectively by Directors to the comparative informationin these financial statements, including the statements of financial position as at 31 December 2011 and 1 January 2011, and thestatements of comprehensive income, statements of changes in equity and statements of cash flows for the year ended 31 December2011 and related disclosures. We were not engaged to report on the restated comparative information and it is unaudited. Ourresponsibilities as part of our audit of the financial statements of the Group and of the Company for the year ended 31 December2012 have, in these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as at 1 January 2012 do not contain misstatements that materially effect the statements of financial position as of 31 December 2012and statements of comprehensive income and statements of cash flows for the year ended.

2. This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

.................................................................. ..................................................................AFRIZAN TARMILI KHAIRUL AZHAR MOHD AFRIZAN HUSAINAF 1300 Chartered Accountant (M)Chartered Accountants 1805/11/14 (J/PH)

Partner

Shah Alam, Malaysia

Date: 25 April 2013

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF LEBTECH BERHAD (CONTINUED)


Group Company Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM RM RM RM RM RM

Non-current assetsProperty, plant and equipment 5 3,417,257 3,590,658 3,546,335 1 1 1 Intangible assets 6 11,803,642 11,803,642 11,803,642 - - - Investment properties 7 510,000 525,000 540,000 - - - Investments in subsidiaries 8 - - - 74,500,002 74,500,002 74,500,002 Deferred tax assets 9 4,472,228 5,048,156 5,048,156 - - -

Total non-current assets 20,203,127 20,967,456 20,938,133 74,500,003 74,500,003 74,500,003

Current assets

Available for sale financialassets 10 2,113,918 4,788,707 10,237,210 - - -

Trade and other receivables 11 143,928,181 149,894,276 147,644,165 3,118,849 3,324,547 3,587,614Current tax assets - 27,294 27,294 - 27,294 27,294Cash and cash equivalents 1,307,732 2,385,360 3,239,405 3,939 5,594 2,625

Total current assets 147,349,831 157,095,637 161,148,074 3,122,788 3,357,435 3,617,533

Total assets 167,552,958 178,063,093 182,086,207 77,622,791 77,857,438 78,117,536

EquityShare capital 13 68,241,838 68,241,838 68,241,838 68,241,838 68,241,838 68,241,838 Reserves 13 9,472,761 6,635,937 11,847,683 10,477,946 10,477,946 10,477,946 Retained earnings/(Accumulated losses) 13 36,474,244 31,707,768 26,646,637 (1,297,993) (1,057,272) (767,174)

Total equity 114,188,843 106,585,543 106,736,158 77,421,791 77,662,512 77,952,610

Non-current liabilitiesLoans and borrowings 14 53,284 155,911 - - - -

Total non-current liabilities 53,284 155,911 - - - -

Current liabilitiesDeferred income 15 3,508,950 1,998,301 2,004,383 - - - Trade and other payables 16 42,179,320 61,268,084 66,085,492 201,000 194,926 164,926 Current tax liabilities 816,360 259,117 254,979 - - - Loans and borrowings 14 6,806,201 7,796,137 7,005,195 - - -

Total current liabilities 53,310,831 71,321,639 75,350,049 201,000 194,926 164,926

Total liabilities 53,364,115 71,477,550 75,350,049 201,000 194,926 164,926

Total equity and liabilities 167,552,958 178,063,093 182,086,207 77,622,791 77,857,438 78,117,536

STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2012


The accompanying notes form an integral part of the financial statements.

Group Company Note 2012 2011 2012 2011

RM RM RM RM

Revenue 17 53,372,350 76,460,839 - - Cost of sales (49,178,661) (67,880,160) - -

Gross profit 4,193,689 8,580,679 - - Other income 11,571,702 2,174,260 1,575 - Administrative expenses (5,239,763) (6,575,412) (283,153) (290,098)Other operating expenses (3,071,202) (1,155,852) - -

Results from operating activities 7,454,426 3,023,675 (281,578) (290,098)Finance costs (530,011) (539,056) - -

Profit/(Loss) before tax 18 6,924,415 2,484,619 (281,578) (290,098)Income tax expense 19 (2,157,939) (1,265,497) 40,857 -

Profit/(Loss) for the year attributable to owners of the Company 4,766,476 1,219,122 (240,721) (290,098)

Other comprehensive expense, net of tax

Gain on fair value changes foravailable-for-sale financial assets (234,378) (1,369,737) - -

Total comprehensive expense for the year attributable to owners of the Company 4,532,098 (150,615) (240,721) (290,098)

Basic earnings per ordinary share (sen) attributable to owners of the Company 20 3.49 0.89

STATEMENTS OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2012



<------------ Non-distributable ------------> DistributableShare Fair value Share Retained Total

Note Capital reserve premium earnings equity Group RM RM RM RM RM

At 1 January 2011 68,241,838 1,369,737 10,477,946 26,646,637 106,736,158

Profit for the year - - - 1,219,122 1,219,122 Other comprehensive income - (1,369,737) - - (1,369,737)

At 31 December 2011 /1 January 2012,as previously stated 68,241,838 - 10,477,946 27,865,759 106,585,543

Effect of adopting MFRS 139 28 - (3,842,009) - 3,842,009 -

At 1 January 2012, as restated 68,241,838 (3,842,009) 10,477,946 31,707,768 106,585,543

Derecognition of available for sale investment - 3,071,202 - - 3,071,202

Total comprehensive income for the year - (234,378) - 4,766,476 4,532,098

At 31 December 2012 68,241,838 (1,005,185) 10,477,946 36,474,244 114,188,843

<------------ Non-distributable ------------> DistributableShare Fair value Share Accumulated Total

Capital reserve premium losses equity Company RM RM RM RM RM

At 1 January 2011 68,241,838 - 10,477,946 (767,174) 77,952,610

Loss for the year - - - (290,098) (290,098)

At 31 December 2011/1 January 2012 68,241,838 - 10,477,946 (1,057,272) 77,662,512

Loss for the year - - - (240,721) (240,721)

At 31 December 2012 68,241,838 - 10,477,946 (1,297,993) 77,421,791

STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2012



Group Company 2012 2011 2012 2011

Note RM RM RM RM

Cash flows from operating activitiesProfit/(Loss) before tax 6,924,415 2,484,619 (281,578) (290,098)

Adjustment for:Allowance for doubtful debts 500,000 500,000 - - Depreciation of property, plant and equipment 5 253,838 425,759 - - Depreciation of investment properties 7 15,000 15,000 - - Derecognition of available-for-sale investment 3,071,202 - - - Dividend income (164,343) (227,012) - - Finance costs 530,011 539,056 - - Gain on disposal of investment in quoted shares (292,529) (164,042) - - Gain on disposal of property, plant and equipment - (119,999) - - Impairment loss on investment in quoted shares - 1,129,850 - - Impairment loss on receivables - 1,155,852 - - Interest income (96,279) (66,723) - - Reversal of impairment loss on receivables (4,803,221) - - - Reversal of trade payables (5,941,335) (1,267,484) - - Reversal of provision for doubtful debts (10,000) (116,600) - -

Operating (loss)/profit before changes in working capital (13,241) 4,288,276 (281,578) (290,098)

Trade and other payables (13,176,054) (3,593,026) 6,074 30,000 Trade and other receivables 11,749,108 (3,795,450) - -

Cash flow used in operations (1,440,187) (3,100,200) (275,504) (260,098)

Interest received 96,279 66,723 - - Interest paid (530,014) (539,056) - - Tax paid (1,024,767) (1,261,360) - - Tax refund 68,151 - 68,151 -

Net cash flow used in operating activities (2,830,538) (4,833,893) (207,353) (260,098)

Cash flows from/(used in) investing activitiesAcquisition of available-for-sale investment (259,000) - - - Acquisition of property, plant and equipment (80,437) (470,083) - - Advance to related companies 28,624 43,109 - - Dividend received 164,343 227,012 - - Proceeds from disposal of available-for-sale investment 2,991,940 3,112,957 - - Proceeds from disposal of property, plant and equipment - 120,000 - - Repayment to subsidiaries - - 205,698 263,067

Net cash flows from investing activities 2,845,470 3,032,995 205,698 263,067

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2012



Group Company 2012 2011 2012 2011

Note RM RM RM RM

Cash flows from/(used in) financing activities(Repayment)/Drawdown of borrowings (520,000) 62,000 - -(Repayment)/Drawdown of hire purchase (97,373) 253,284 - -Decrease/(Increase) in pledged deposits 1,078,435 (65,093) - -

Net cash flows from financing activities 461,062 250,191 - -

Net increase/(decrease) in cash and cash equivalents 475,997 (1,550,707) (1,655) 2,969 Cash and cash equivalents at 1 January (4,506,419) (2,955,712) 5,594 2,625

Cash and cash equivalents at 31 December 12 (4,030,422) (4,506,419) 3,939 5,594

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2012 (CONTINUED)



1. CORPORATE INFORMATION

Lebtech Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of BursaMalaysia Securities Berhad. The address of its principal place of business and registered office of the Company is as follows:

Wisma Lebar DaunNo 2, Jalan Tengku Ampuan Zabedah J9/JSeksyen 9, 40000 Shah AlamSelangor Darul Ehsan

The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in note 8to the financial statements. There has been no significant change in the nature of these activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 25 April 2013.

2. BASIS OF PREPARATION

The financial statements of the Group and the Company have been prepared in accordance with Malaysian Financial ReportingStandards (“MFRS”), International Financial Reporting Standards and the Companies Act, 1965 in Malaysia. These are the first setof financial statements of the Group and the Company prepared in accordance with MFRSs, including MFRS 1, First-Time Adoptionof Malaysia Financial Reporting Standards. The accounting policies have been applied in preparing the financial statements of theGroup and the Company for the year ended 31 December 2012, the comparative information presented in these financial statementsfor the year ended 31 December 2011 and the preparation of the opening MFRS statement of financial at 1 January 2011.

In the previous years, the financial statements of the Group and the Company were prepared in accordance with Financial ReportingStandards (“FRSs”). There are no adjustments arising from the transition to MFRSs.

The financial statements have been prepared under the historical cost convention except as disclosed in the respective significantaccounting policies.

These financial statements are presented in Ringgit Malaysia.

Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect theapplication of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ fromthese estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in theperiod in which the estimate is revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significanteffect on the amounts recognised in the financial statements other than those disclosed in the following notes:

• Note 6 - measurement of the recoverable amounts of intangible assets• Note 7 - valuation of investment properties• Note 9 - recognition of deferred tax assets/liabilities

NOTES TO THEFINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2012


3. STANDARDS ISSUED BUT NOT YET EFFECTIVE

The following are accounting standards, amendments and interpretations of the MFRS framework that have been issued by theMalaysian Accounting Standards Board (“MASB”) but are not yet effective have not been adopted by the Group and the Company:

Effective for financial periods beginning on or after 1 July 2012

• Amendments to MFRS 101, Presentation of Items of Other Comprehensive Income

Effective for financial periods beginning on or after 1 January 2013

• MFRS 10, Consolidated Financial Statements• MFRS 11, Joint Arrangements • MFRS 12, Disclosure of Interests in Other Entities • MFRS 13, Fair Value Measurement• MFRS 119, Employee Benefits (2011) • MFRS 127, Separate Financial Statements (2011) • MFRS 128, Investment in Associates and Joint Ventures (2011) • IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine• Amendments to MFRS 7, Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities• Amendments to MFRS 1, First-time Adoption of Malaysia Financial Reporting Standards – Government Loans • Amendments to MFRS 1, First-time Adoption of Malaysia Financial Reporting Standards (Annual Improvements 2009-2011

Cycle)• Amendments to MFRS 101, Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 132, Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 7, Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities• Amendments to MFRS 1, First-time Adoption of Malaysia Financial Reporting Standards – Government Loans • Amendments to MFRS 1, First-time Adoption of Malaysia Financial Reporting Standards (Annual Improvements 2009-2011

Cycle)• Amendments to MFRS 101, Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 132, Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2009-2011 Cycle)• Amendments to MFRS 10, Consolidated Financial Statements: Transition Guidance• Amendments to MFRS 11, Joint Arrangements: Transition Guidance• Amendments to MFRS 12, Disclosure of Interest in Other Entities: Transition Guidance


• Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities


• MFRS 9, Financial Instruments (2009) • MFRS 9, Financial Instruments (2010) • Amendments to MFRS 7, Financial Instruments: Disclosure – Mandatory Date of MFRS 9 and Transition Disclosures

The Group and the Company will adopt the pronouncements when they become effective in the respective financial periods. Thesepronouncements are not expected to have any effect to the financial statements of the Group and the Company upon their initialapplication, except so described below:

NOTES TO THEFINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2012 (CONTINUED)


3. STANDARDS ISSUED BUT NOT YET EFFECTIVE (CONTINUED)

Effective for financial periods beginning on or after 1 January 2015 (continued)

(a) MFRS 10, ‘Consolidated Financial Statements’ (effective from 1 January 2013) changes the definition of control. An investorcontrols an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the abilityto affect those returns through its power over the investee. It establishes control as the basis for determining which entities areconsolidated in the consolidated financial statements and sets out the accounting requirements for the preparation ofconsolidated financial statements. It replaces all the guidance on control and consolidation in MFRS 127, ‘Consolidated andSeparate Financial Statements’ and IC Interpretation 112, ‘Consolidation – Special Purpose Entities’.

(b) MFRS 12, ‘Disclosures of Interests in Other Entities’ (effective from 1 January 2013) sets out the required disclosures for entitiesreporting under the two standards, MFRS 10 and MFRS 11, and replaces the disclosure requirements currently found in MFRS128, ‘Investments in Associates’. It requires entities to disclose information that helps financial statement readers to evaluatethe nature, risks and financial effects associated with the entity’s interests in subsidiaries, associates, joint arrangements andunconsolidated structure entities.

(c) MFRS 13, ‘Fair Value Measurement’ (effective from 1 January 2013) aims to improve consistency and reduce complexity byproviding a precise definition of fair value measurement and disclosure requirements for use across MFRSs. The requirementsdo not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already requiredor permitted by other standards. The enhanced disclosure requirements are similar to those in MFRS 7, ‘Financial Instruments:Disclosures’, but apply to all assets and liabilities measured at fair value, not just financial ones.

(d) The revised MFRS 127, ‘Separate Financial statements’ (effective from 1 January 2013) includes the provision on separatefinancial statements that are left after the control provisions of MFRS 127 have been included in the new MFRS 10.

(e) Amendments to MFRS 101, ‘Presentation of Items of Other Comprehensive Income’ (effective 1 July 2012) requires entities toseparate items presented in ‘other comprehensive income’ (‘OCI) in the statement of comprehensive income into two groups,based on whether or not they may be recycled profit or loss in the future. The amendments do not address which items arepresented in OCI.

(f) Amendments to MFRS 119, ‘Employee Benefits’ (effective from 1 January 2013) makes significant changes to the recognitionand the measurement of defined benefit pension expense and termination benefits, and to the disclosures for all employeebenefits. Actuarial gains and losses will no longer be deferred using the corridor approach. MFRS 119 shall be withdrawn onapplication of this amendment.

(g) Amendment to MFRS 7, ‘Financial Instruments: Disclosures’ (effective from 1 January 2013) requires more extensivedisclosures focusing on quantitative information about recognized financial instruments that are offset in the balance sheetand those that are subject to master netting or similar arrangements irrespective of whether they are offset.

(h) Amendment to MFRS 132, ‘Financial Instruments: Presentation’ (effective from 1 January 2014) does not change the currentoffsetting model in MFRS 132. It clarifies the meaning of ‘currently has a legally enforceable right of set-off’ that the right of set-off must be available today (not contingent on a future event) and legally enforceable for all counterparties in the normalcourse of business. It clarifies that some gross settlement mechanisms with features that are effectively equivalent to netsettlement will satisfy the MFRS 132 offsetting criteria.

(i) MFRS 9, ‘Financial Instruments – Classification and Measurement of Financial Assets and Financial Liabilities’ (effective from1 January 2015) replaces the multiple classification and measurement models in MFRS 139 with a single model that has onlytwo classification categories: amortised cost and fair value. The basis of classification depends on the entity’s business modelfor managing the financial assets and the contractual cash flow characteristics of the financial asset.

The guidance in MFRS 139 on impairment of financial assets and hedge accounting continues to apply.

MFRS 7 requires disclosures on transition from MFRS 139 to MFRS 9.



4. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to the periods presented in these financial statements, andhave been applied consistently by the Group entities, other than those disclosed in note 4(b) - Financial Instruments.

(a) Basis of consolidation

(i) Subsidiaries

The consolidated financial statements comprised the financial statements of the Company and its subsidiaries as at thereporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statementsare prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactionsand events in similar circumstances.

Subsidiaries are entities, controlled by the Group. Control exists when the Group has the ability to exercise its power togovern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control,potential voting rights that presently are exercisable are taken into account. Subsidiaries are consolidated using thepurchase method of accounting, except for business combinations arising from common control transfer.

The consideration transferred for the acquisition of subsidiary is the fair values of the asset transferred, the liabilitiesincurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferredincludes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assetsacquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fairvalues at the acquisition date. The Group recognises any controlling interest in the acquire on the acquisition-by-acquisitionbasis, either at the fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’sidentifiable net assets.

Acquisition-related costs are expensed as incurred.

Subsidiaries are fully consolidated from the date that control commences until the date that control ceases.

Investments in subsidiaries are stated in the Company’s separate financial statements balance sheet at cost lessaccumulated impairment losses, if any. On the disposal of such investments, the difference between net disposal proceedsand their carrying amounts are included in profit and loss.

(ii) Transactions eliminated on consolidation

All intra-group balances and transactions, and any unrealised gains and losses arising from intra-group transactions, areeliminated in full.

(b) Financial instruments

Financial instruments are categorised and measured using accounting policies as mentioned below. Before 1 January 2010,different accounting policies were applied.

(i) Initial recognition and measurement

A financial instrument is recognised in the statements of financial position when, and only when, the Group or the Companybecome a party to the contractual provisions of the instrument.

A financial instrument is recognise initially, at its fair value plus, in the case of a financial instrument not at fair valuethrough profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.



4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise financial instruments as follows:

Financial assets

(a) Loans and receivables

Loans and receivables category comprises trade and other receivables and cash and cash equivalents.

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effectiveinterest method.

(b) Available-for-sale financial assets

Available for sale category comprises investment in equity and debt securities instruments that are not held for trading.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair valuecannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale aresubsequently measured at their fair values with the gain or loss recognised in other comprehensive income, exceptfor impairment losses, which is recognised in profit or loss. On derecognition, the cumulative gain or loss recognisedin other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrumentusing the effective interest method is recognised in profit or loss.

All financial assets are subject to review for impairment losses (see note 4(k)(i)).

Financial liabilities

All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value throughprofit or loss.

Fair value through profit or loss category comprises financial liabilities that are held for trading, derivatives or financialliabilities that are specifically designated into this category upon initial recognition.

Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values withthe gain or loss recognised in profit or loss.

(iii) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holderfor a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modifiedterms of a debt instrument.

Financial guarantee contracts are classified as deferred income and are amortised to profit or loss using a straight-linemethod over the contractual period or, when there is no specified contractual period recognised in profit or loss upondischarge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of theobligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying valueis adjusted to the obligation amount and accounted for as a provision.




(b) Financial instruments (continued)

(iv) Regular way purchase or sale of financial assets

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery ofthe asset within the time frame established generally by regulation or convention in the marketplace concerned.

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade dateaccounting. Trade date accounting refers to:

(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable

from the buyer for payment on the trade date

(v) Derecognition

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financialasset expire of the financial asset is transferred to another party without retaining control or substantially all risks andrewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum ofthe consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain orloss that had been recognised in equity in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is dischargedor cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financialliability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferredor liabilities assumed, is recognised in profit or loss.

(c) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are stated at cost less accumulated depreciation and any impairment loss.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assetsincludes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to workingcondition for its intended use, and the costs of dismantling and

removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes thecost of materials and direct labour and, for qualifying assets, borrowing costs are capitalised in accordance with the Group’saccounting policy. Purchased software that is integral to the functionality of the related equipment is capitalised as part ofthat equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for asseparate items (major components) of property, plant and equipment.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item ifit is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measuredreliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.




(c) Property, plant and equipment (continued)

(iii) Depreciation and impairment

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted forcost, less its residual value.

Depreciation is recognised in the statement of comprehensive income on a straight-line basis over the estimated usefullives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the leaseterm and their useful lives. Freehold land is depreciated on a straight line method using the same rate of the freeholdbuilding due to the freehold land cost on which the building is located cannot be segregated.

The estimated useful lives for the current and comparative periods are as follows:

• leasehold land and buildings 50 years• plant and equipment 2.5 - 10 years• fixtures and fittings 8 - 10 years• motor vehicles 5 years

Depreciation methods, useful lives and residual values are reassessed at each financial year-end and adjusted prospectively,if appropriate.

The carrying value of property, plant and equipment are reviewed for impairment when events or changes in circumstancesindicate that the carrying value may not be recoverable. If such indication exists, an analysis is performed to assess whetherthe carrying amount of the asset is fully recoverable. A write down is made if the carrying amount exceeds the recoverableamount. Likewise, when the conditions for impairment no longer exist after considering indications from both external andinternal sources, a write-back on the asset values will be performed. The impairment loss is charged to profit or loss unlessit reverses a previous revaluation in which case it is charged to the revaluation surplus.

(iv) Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expectedfrom its use or disposal.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds fromdisposal with the carrying amount of property, plant and equipment and are recognised net within “other income” or “otherexpenses” respectively in profit or loss.

(d) Intangible assets

(i) Goodwill

Goodwill arises on business combinations are measured at cost less any accumulated impairment losses. In respect ofequity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment and animpairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carryingamount of the equity accounted investee.

For acquisitions prior to 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group’sinterest in the fair values of the net identifiable assets and liabilities.

For business acquisitions beginning from 1 January 2006, goodwill represents the excess of the cost of the acquisition overthe Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.

Any excess of the Group’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilitiesover the cost of acquisition is recognised immediately in profit or loss.




(d) Intangible assets (continued)

(i) Goodwill (continued)

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cashgenerating units (“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unitor group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill ismonitored for internal management purposes. Goodwill is monitored at the operating segment level.

(ii) Impairment

Goodwill and intangible assets with indefinite useful lives are not amortised but are tested for impairment annually andwhenever there is an indication that they may be impaired.

The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair valueless costs to sell. Any subsequent increase in recoverable amount is recognised in profit or loss unless it reverses animpairment loss on a revalued asset in which case it is taken to revaluation surplus reserve. Impairment is recognisedimmediately as expenses and is not subsequently reversed.

(e) Investment properties

Investment properties are properties which are owned to earn rental income or for capital appreciation or for both. These includeland held for a currently undetermined future use. Properties that are occupied by the companies in the Group are accountedfor as owner-occupied rather than as investment properties.

Investment property carried at cost

Investment properties are stated at cost less any accumulated depreciation consistent with the accounting policy for property,plant and equipment as stated in accounting policy note 4(c).

Depreciation is charged to the statement of comprehensive income on a straight-line basis over the estimated useful lives offifty (50) years for buildings.

Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that the future economic benefitsassociated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs andmaintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of thereplaced part is derecognised.

Investment property is derecognised either when it has been disposed of or when the investment property is permanentlywithdrawn from use and no future economic benefit is expected from its disposal.

Gains and losses on disposals are determined by comparing net disposal proceeds with the carrying amount and are includedin profit or loss.

Property is subject to impairment review whenever events or changes in circumstances indicate that the carrying amount maynot be recoverable. The impairment loss is charged to profit or loss unless it reverses a previous revaluation in which case it ischarged to the revaluation surplus.

(f) Leased assets

Leases

Lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments, the right to usean asset for an agreed period of time.




(f) Leased assets (continued)

Operating leases

Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified asoperating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profitor loss on the straight line basis over the lease period. Initial direct costs incurred by the Group in negotiating and arrangingoperating leases are recognised in profit or loss when incurred.

Finance lease

Leases in terms of which the Group and the Company assume substantially all the risks and rewards of ownership are classifiedas finance leases. On initial recognition of the leased asset is measured at an amount equal to the lower of its fair value and thepresent value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance withthe accounting policy applicable to that asset.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of theoutstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodicrate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimumlease payments over the remaining term of the lease when the lease adjustment is confirmed.

(g) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-outprinciple and includes expenditure incurred in acquiring the inventories and bringing them to their existing location andcondition. In the case of finished goods, cost includes an appropriate share of production overheads based on normal operatingcapacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs ofcompletion and the estimated costs to make the sale.

(h) Receivables

Prior to 1 January 2010, receivables were initially recognised at their costs and subsequently stated at cost less allowance fordoubtful debts.

Following the adoption of FRS 139, trade and other receivables are categorised and measured as loans and receivables inaccordance with note 4(b).

(i) Constructions work-in-progress

Construction work-in-progress represents the gross unbilled amount expected to be collected from customers for contract workperformed to date. It is measured at cost plus profit recognised to date less progress billing and recognised losses. Cost includesall expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the Company’scontract activities based on normal operating capacity.

Construction work-in-progress is presented as part of trade and other receivables in the statement of financial position for allcontracts in which costs incurred plus recognised profits exceed progress billings. If progress billings exceed costs incurred plusrecognised profits, then the difference is presented as deferred income in the statement of financial position.

(j) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which havean insignificant risk of changes in value. For the purpose of the statement of cash flow, cash and cash equivalents are presentednet of bank overdrafts and pledged deposits.

Cash and cash equivalents (other than bank overdrafts) are categorised and measured as loans and receivables in accordancewith policy note 4(b).




(k) Impairment

(i) Financial assets

All financial assets (except investment in subsidiaries) are assessed at each reporting date whether there is any objectiveevidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset.Losses expected as a result of future events, no matter how likely, are not recognised. For an equity instrument, a significantor prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidenceexists, then the financial asset’s recoverable amount is estimated.

An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the differencebetween the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s originaleffective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as thedifference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s currentfair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financialasset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income isreclassified from equity and recognised to profit or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and ismeasured as the difference between the asset’s carrying amount and the present value of estimated future cash flowsdiscounted at the current market rate of return for a similar financial asset.

Impairment losses recognised in profit or loss for an investment in an equity instrument is not reversed through profit orloss.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to anevent occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extentthat the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment notbeen recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

(ii) Other assets

The carrying amounts of other assets (except for inventories, assets arising from construction contract and deferred taxasset) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If anysuch indication exists, then the asset’s recoverable amount is estimated.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cashinflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated tocash-generating units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs tosell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discountrate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverableamount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units areallocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amountof the other assets in the unit (groups of units) on a prorata basis.




(k) Impairment (continued)

(ii) Other assets (continued)

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in priorperiods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists.An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount sincethe last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amountdoes not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if noimpairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the year in which thereversals are recognised.

(l) Employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measuredon an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Grouphas a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and theobligation can be estimated reliably.

The Group’s contributions to statutory pension funds are charged to the profit or loss in the year to which they relate. Once thecontributions have been paid, the Group has no further payment obligations.

(m) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can beestimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions aredetermined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of thetime value of money and the risks specific to the liability. The unwinding of the discount is recognised as financing cost.

Contingent liabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, theobligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possibleobligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are alsodisclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within itsgroup, the Company considers these to be insurance arrangements, and accounts for them as such. In this respect, theCompany treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company willbe required to make a payment under the guarantee.

(n) Revenue

(i) Goods sold

Revenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returns andallowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards ofownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possiblereturn of goods can be estimated reliably, and there is no continuing management involvement with the goods.




(n) Revenue (continued)

(ii) Construction contracts

Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims andincentive payments to the extent that it is probable that they will result in revenue and can be measured reliably. As soonas the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised in profitor loss in proportion to the stage of completion of the contact.

The stage of completion is assessed by reference to the proportion that contract costs incurred for work performed to datebear to the estimated total contract costs. When the outcome of a construction contract cannot be estimated reliably,contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable. An expectedloss on a contract is recognised immediately in the profit or loss.

(o) Other income

(i) Rental income

Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease.Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

(ii) Dividend income

Dividend income is recognised in profit or loss on the date that the Company has the right to receive payment is established.

(iii) Interest income

Interest income is recognised as it accrues, using the effective interest method in profit or loss.

(p) Borrowing costs

Borrowings costs that are not directly attributable to the acquisition, construction or production of a qualifying asset arerecognised in profit or loss using the effective interest method.

Before 1 January 2010, all borrowing costs were recognised in profit or loss using the effective interest method in the period inwhich they are incurred.

Following the adoption of revised MFRS 123, Borrowing Costs, borrowing costs directly attributable to the acquisition,construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get readyfor their intended use or sale, are capitalised as part of the cost of those assets.

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is beingincurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or saleare in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary toprepare the qualifying asset for its intended use or sale are interrupted or completed.

(q) Income tax expense

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extentthat it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted bythe end of the reporting period, and any adjustment to tax payable in respect of previous years.




(q) Income tax expense (continued)

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts ofassets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the followingtemporary differences: the initial recognition of goodwill, and the initial recognition of assets or liabilities in a transaction that isnot a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the taxrates that are expected to apply to the temporary differences when they reverse, based on the laws that have been enacted orsubstantively enacted by the end of the reporting period.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which thetemporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced tothe extent that it is no longer probable that the related tax benefit will be realised.

(r) Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividingthe profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary sharesoutstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholdersand the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, whichcomprise convertible notes and share options granted to employees.

(s) Operating segments

In the previous years, a segment was a distinguishable component of the Group that was engaged either in providing productsor services (business segment), or in providing products or services within a particular economic environment (geographicalsegment) which was subject to risks and rewards that were different from those of other segments.

Following the adoption of MFRS 8, Operating Segments, an operating segment is a component of the Group that engages inbusiness activities from which it may earn revenues and incur expenses, including revenues and expenses that relate totransactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by thechief operating decision maker of the Group, to make decisions about resources to be allocated to the segment and assess itsperformance, and for which discrete financial information is available.

(t) Share capital

Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, areaccounted for as share premium. Both ordinary shares and share premium are classified as equity. Cost incurred directlyattributable to the issuance of shares are accounted for as a deduction from share premium. Otherwise they are charged to theprofit or loss. Dividends to shareholders are recognised in equity in the period in which they are declared and approved.



5. PROPERTY, PLANT AND EQUIPMENT

Plant,machinery, Fixtures,

Leasehold office and tele- fittingsGroup land and Motor communication and

buildings vehicles equipment renovation TotalCost RM RM RM RM RM

At 1 January 2011 3,566,005 2,806,271 948,498 260,290 7,581,064 Additions - 431,295 38,788 - 470,083 Disposal - (475,000) - - (475,000)

At 31 December 2011/1 January 2012 3,566,005 2,762,566 987,286 260,290 7,576,147 Additions - - 80,437 - 80,437

At 31 December 2012 3,566,005 2,762,566 1,067,723 260,290 7,656,584

Accumulated DepreciationAt 1 January 2011 499,240 2,448,681 863,827 222,981 4,034,729 Depreciation 71,320 281,446 62,556 10,437 425,759 Disposal - (474,999) - - (474,999)

At 31 December 2011/1 January 2012 570,560 2,255,128 926,383 233,418 3,985,489 Depreciation 71,320 127,387 44,955 10,176 253,838

At 31 December 2012 641,880 2,382,515 971,338 243,594 4,239,327

Carrying amountsAt 1 January 2011 3,066,765 357,590 84,671 37,309 3,546,335

At 31 December 2011 2,995,445 507,438 60,903 26,872 3,590,658

At 31 December 2012 2,924,125 380,051 96,385 16,696 3,417,257

Motor vehiclesCompany RM

CostAt 1 January 2011/31 December 2011/31 December 2012 103,017

DepreciationAt 1 January 2011/31 December 2011/31 December 2012 103,016

Carrying amountsAt 1 January 2011/31 December 2011/31 December 2012 1

Motor vehicle acquired on hire purchase

At 31 December 2012, the Group and the Company has motor vehicle acquired by means of hire purchase agreement with carryingvalue of RM294,718 (2011: RM380,977) and RM1 (2011: RM1) respectively. The new motor vehicle is registered under the nameof a director via trust deeds.



5. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Depreciation for the year

The Group’s depreciation during the year amounting to RM8,197 (2011: RM8,008) has been capitalised in the amount due fromcontract customers included under trade and other receivables in note 11.

Leasehold land and building

The carrying value of the leasehold land and building have not been segregated from the cost and carrying amounts as theinformation required is not available.

6. INTANGIBLE ASSETS

Group31.12.2012 31.12.2011 1.1.2011

RM RM RM

Goodwill 11,803,642 11,803,642 11,803,642

The recoverable amount of the investment in a subsidiary was based on its value in use and the recoverable amount is higher thanthe carrying amount of this intangible asset. There is no impairment loss recognised during the year.

Value in use was determined by discounting the future cash flows generated from the continuing use of the investment in a subsidiarywas based on the following key assumptions:

• Cash flows were projected based on actual operating results and the 5-year business plan. • The subsidiary will continue its operation indefinitely.• The size of operation will remain with at least or not lower than the current results.• The discount rate used was the weighted average cost of capital rate for the Group at 10.96%.

The key assumptions represent management’s assessment of future trends in the construction industry and are based on bothexternal sources and internal sources (historical data).

The above estimates are particularly sensitive in the following areas:• An increase of 1 percentage point in the discount rate used would have no impact in impairment of goodwill.• A 10 percent decrease in future planned revenues would have no impact on the impairment of goodwill.



7. INVESTMENT PROPERTIES

Freehold land and buildingGroup RMCost

At 1 January 2011/31 December 2011/31 December 2012 750,000

Accumulated depreciationAt 1 January 2011 210,000 Depreciation for the year 15,000

At 31 December 2011/1 January 2012 225,000Depreciation for the year 15,000

At 31 December 2012 240,000

Carrying amountsAt 1 January 2011 540,000

At 31 December 2011 525,000

At 31 December 2012 510,000

Fair valueAt 1 January 2011/31 December 2011/31 December 2012 1,860,000

The carrying value of the freehold land and building have not been segregated from the cost and carrying amounts as the informationrequired is not available.

The valuation of investment property was prepared by a qualified external valuer by using a comparative method of valuation. Thedesktop valuation was performed on 12 January 2011 by external valuer. The Directors are of the opinion that the value of theproperty does not vary significantly than the last valuation.

The following are recognised in the statement of comprehensive income in respect of investment properties:

31.12.2012 31.12.2011RM RM

Direct operating expenses 6,700 7,280

Investment properties are located in Malaysia and comprise:

Property Title Approximate net lettable area

Lot 9024, Lot 9026 & Lot 9028 at Freehold Land - 468 sq. meterJalan Mahang 1, Taman Meru Utama, Klang Building - 1,809 sq. meter

Security

At 31 December 2012, the properties are pledged to a licensed bank to secure banking facilities granted to the Group (see note 14).



8. INVESTMENTS IN SUBSIDIARIES

Company31.12.2012 31.12.2011 1.1.2011

RM RM RM

At cost:Unquoted shares 74,700,002 74,700,002 74,700,002 Direct operating expenses (200,000) (200,000) (200,000)

74,500,002 74,500,002 74,500,002

Details of the subsidiaries are as follows:

Country of Effective ownership interestName of subsidiaries incorporation Principal activities 31.12.2012 31.12.2012 1.1.2011

% % %

Lebtech Construction Malaysia Civil and building construction 100 100 100Sdn. Bhd.

Lebtech Energy Sdn. Bhd Malaysia Trading and services 100 100 100

Paksi Aman Sdn. Bhd. Malaysia Dormant 100 100 100

* All subsidiaries are audited by Afrizan Tarmili Khairul Azhar

9. DEFERRED TAX ASSETS

Recognised deferred tax assets

Deferred tax assets are attributable to the following:

Assets Liabilities Net31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM RM RM RM RM RM RM RM RMProperty, plant and

equipment - - - (43,895) (43,317) (43,317) (43,895) (43,317) (43,317)Provisions 4,516,123 5,091,473 5,091,473 - - - 4,516,123 5,091,473 5,091,473

Net tax assets 4,516,123 5,091,473 5,091,473 (43,895) (43,317) (43,317) 4,472,228 5,048,156 5,048,156

Movement in temporary differences during the year

Recognised Recognisedin income At in income

At statement 31.12.2011/ statement At1.1.2011 (note 19) 1.1.2012 (note 19) 31.12.2012

Group RM RM RM RM RM

Property, plant and equipment (43,317) - (43,317) (578) (43,895)Provisions 5,091,473 - 5,091,473 (575,350) 4,516,123

Net tax assets 5,048,156 - 5,048,156 (575,928) 4,472,228



10. AVAILABLE FOR SALE FINANCIAL ASSETS

31.12.2012 31.12.2011 1.1.2011Group RM RM RM

Current Quoted shares in Malaysia 2,133,918 4,788,707 10,237,210 Market value of quoted investment 2,133,918 4,788,707 10,237,210

11. TRADE AND OTHER RECEIVABLES

Group Company31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Note RM RM RM RM RM RM

TradeTrade receivables a - 2,255,164 3,117,920 - - -Amount due fromcontract customers b 12,023,557 15,416,572 14,629,503 - - -

Amount due from related parties c 130,497,753 131,846,516 129,414,277 - - -

142,521,310 149,518,252 147,161,700 - - -

Non-tradeAmount due fromsubsidiaries d - - - 3,118,639 3,324,337 3,587,404

Other receivables 1,214,487 181,114 293,563 210 210 210Deposits 182,752 182,320 180,320 - - -Prepayments 9,632 12,590 8,582 - - -

1,406,871 376,024 482,465 3,118,849 3,324,547 3,587,614

143,928,181 149,894,276 147,644,165 3,118,849 3,324,547 3,587,614

Note a

Included in trade receivables of the Group at 31 December 2012 are retention sums of RM Nil (2011: RM1,742,400) relating toamount due from contract customers.

The Group’s credit policy provides trade receivable with credit period of up to 60 days (2011: 60 days). Significant credit andrecovery risks associated with receivable have been provided for in the financial statement.

The ageing of receivables as at the end of the reports period is disclosed in note 23.4.



11. TRADE AND OTHER RECEIVABLES (CONTINUED)

Note b

Amount due from contract customers

Group31.12.2012 31.12.2011 1.1.2011

Note RM RM RM

Aggregate costs incurred to date 419,802,685 381,314,328 362,829,359

Add: Attributable profits 53,873,228 51,630,077 52,495,085

473,675,913 432,944,405 415,324,444

Less: Progress billings (465,161,306) (419,526,134) (402,699,324)

8,514,607 13,418,271 12,625,120

Deferred income 15 3,508,950 1,998,301 2,004,383

12,023,557 15,416,572 14,629,503

Addition to aggregate costs incurred during the year include:

Depreciation of property, plant and equipment 8,197 8,008

Note c

The trade amounts due from related parties are progress billings receivable. The amounts are unsecured and subject to the normaltrade terms. Included in progress billings receivable at 31 December 2012 are retention sums of RM37,253,812 (2011:RM30,953,529) relating to amount due from contract customers.

Note d

Amount due from subsidiaries are unsecured, interest-free and repayable on demand.

12. CASH AND CASH EQUIVALENTS

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011RM RM RM RM RM RM

Deposit placed withlicensed banks 1,252,580 2,331,015 2,265,922 - - -

Cash and bank balances 55,152 54,345 973,483 3,939 5,594 2,625

1,307,732 2,385,360 3,239,405 3,939 5,594 2,625Less:Bank overdraft repayable on demand (4,085,574) (4,560,764) (3,929,195) - - -

Deposit pledged (1,252,580) (2,331,015) (2,265,922) - - -

(4,030,422) (4,506,419) (2,955,712) 3,939 5,594 2,625



12. CASH AND CASH EQUIVALENTS (CONTINUED)

Deposits placed with licensed banks pledged for bank facilities

Included in the deposits placed with licensed banks are RM1,227,860 (2011:RM1,188,595) pledged for bank facilities andRM24,720 (2011:RM1,142,420) pledged as collateral for bank facilities granted to third parties and disclosed in note 14.

13. CAPITAL AND RESERVES

Group and Company Amount Amount AmountShare capital 31.12.2012 31.12.2011 1.1.2011

RM RM RMAuthorised:500,000,000 Ordinary shares ofRM0.50 each 250,000,000 250,000,000 250,000,000

Issued and fully paid:136,483,676 Ordinary shares ofRM0.50 each 68,241,838 68,241,838 68,241,838

GroupReserves

Fair value reserves (1,005,185) (3,842,009) 1,369,737 Share premium reserves 10,477,946 10,477,946 10,477,946

9,472,761 6,635,937 11,847,683

Retained earnings 36,474,244 31,707,768 26,646,637

CompanyReserves

Share premium reserves 10,477,946 10,477,946 10,477,946

Accumulated losses (1,297,993) (1,057,272) (767,174)

Fair value reserve

Fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investmentsare derecognised or impaired.

Section 108 tax credit

Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit to frank all of its distributablereserves at 31 December 2012 if paid out as dividends.

The Finance Act 2007 introduced a single tier company income tax system with effect from year of assessment 2008. As such, theSection 108 tax credit will be available to the Company until such time the credit is fully utilised or upon expiry of the six-yeartransitional period on 31 December 2013, whichever is earlier.



14. LOANS AND BORROWINGS

This note provides information about the contractual terms of the Group’s and the Company’s interest-bearing loans and borrowings.For more information about the Group’s and the Company’s exposure to interest rate, see note 23.

31.12.2012 31.12.2011 1.1.2011RM RM RM

Non-current

Finance lease liabilities 53,284 155,911 -

Current

Banker acceptance 2,618,000 3,138,000 3,076,000 Finance lease liabilities 102,627 97,373 - Bank overdrafts 4,085,574 4,560,764 3,929,195

6,806,201 7,796,137 7,005,195

6,859,485 7,952,048 7,005,195

The first bank overdraft amounting to RM2,497,015 (2011:RM2,440,109) bears interest at 1.75% to 3.50% (2011:1.75% to 3.60%)per annum above the bank’s Base Lending Rate and is secured by the followings:

a) third party first legal charge of RM2,500,000 over properties owned by a Director;b) corporate guarantee for RM2,900,000 by the Company; andc) registered charge over fixed deposit of RM1,227,860(2011: RM1,188,595).

The second bank overdraft amounting to RM1,492,127 (2011:RM1,494,846) bears interest at 2.50% (2011:2.00%) per annumabove the bank’s Base Lending Rate and is secured by the followings:

a) first legal charge of RM2,000,000 over properties owned by a Director;b) legal charge of RM5,000,000 over properties owned by the Group with a carrying amount of RM510,000 (2011:RM525,000)

(see note 7);c) personal guarantee for RM2,000,000 by a Director; andd) corporate guarantee for RM5,000,000 by the Company.

The third bank overdraft amounting to RM96,432 (2011:RM625,809) bears interest at 2.5% (2011:2.00%) per annum above thebank’s Base Lending Rate and is secured by the followings:



The first bankers acceptance amounting to RM2,318,000 (2011:RM2,846,000) bears interest at 2.00% (2011:2.00%) per annumabove cost of fund from the date of claim until the date of repayment thereof. It is secured and guaranteed by the followings:





14. LOANS AND BORROWINGS (CONTINUED)

The second bankers acceptance amounting to RM300,000 (2011:RM292,000) bears interest at 1.50% (2011:1.50%) per annumabove cost of fund from the date of claim until the date of repayment thereof. It is secured and guaranteed by the followings:

a) third party first legal charge of RM2,500,000 over properties owned by a Director;b) corporate guarantee for RM2,900,000 by the Company; andc) registered charge over fixed deposit of RM1,227,860 (2011:RM1,188,595).

Finance lease liabilities

Finance lease liabilities were payable as follows:

Present valueFuture minimum minimum lease lease payments Interest payments

2012 2011 2012 2011 2012 2011RM RM RM RM RM RM

Less than one year 108,226 108,100 5,599 10,727 102,627 97,373 Between one and five years 54,083 162,150 799 6,239 53,284 155,911

Interest rate on finance leases for the 2012 financial year was 2.70% (2011:2.70%) per annum on a flat rate basis.

15. DEFERRED INCOME

Group31.12.2012 31.12.2011 1.1.2011

Note RM RM RM

Customer advances for construction work-in-progress 11 3,508,950 1,998,301 2,004,383

16. TRADE AND OTHER PAYABLES

Group Company31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Note RM RM RM RM RM RM

TradeTrade payables a 41,646,283 60,723,195 65,512,992 - - -

Non-tradeAmount due to arelated party b - 174,759 131,651 - - -

Other payables 436,037 218,248 196,492 180,000 179,926 2 Accrued expenses 97,000 151,882 244,427 21,000 15,000 16,924

533,037 544,889 572,570 201,000 194,926 16,926

42,179,320 61,268,084 66,085,492 201,000 194,926 16,926



16. TRADE AND OTHER PAYABLES (CONTINUED)

Note a

i) The normal trade terms granted to the Group range from 30 days to 90 days (2011: 30 days to 90 days).

ii) Included in the trade payables are:-

a) Amount totaling RM2,014,074 (2011:RM2,742,004) owing to a related party;andb) Amount totaling RM8,139,690 (2011: RM16,246,405) are retention sums.

Note b

Amount due to a related party is unsecured, interest free and repayable on demand.

17. REVENUE

Group2012 2011

RM RM

Construction contracts 53,372,350 76,460,839

18. PROFIT/(LOSS) BEFORE TAX

Group Company2012 2011 2012 2011

RM RM RM RM

Profit for the year is arrived at after charging:Auditors' remuneration- audit services 86,500 91,000 15,000 15,000 - other service 24,000 24,000 24,000 - Construction costs 49,178,661 67,880,160 - - Depreciation of investment properties 15,000 15,000 - - Depreciation of property, plant and equipment 253,838 425,759 - - Derecognition of available-for-sale investment 3,071,202 - - - Impairment loss on:- allowance for doubtful debts 500,000 500,000 - - - trade amount due from related companies - 1,155,852 - - Interest expense on:- bank overdraft 355,768 363,458 - - - borrowings 163,516 168,265 - - - finance lease 10,727 7,333 - - Impairment loss on available-for-sale investment in quoted shares - 1,129,850 - - Personnel expenses (including key management personnel)- contribution to Employees Provident Fund 290,147 301,555 - - - wages, salaries and others 2,714,341 2,858,469 150,000 150,000



18. PROFIT/(LOSS) BEFORE TAX (CONTINUED)

Group Company2012 2011 2012 2011

RM RM RM RM

and after crediting:Dividend income (164,343) (227,012) - - Gain on disposal of investment in quoted shares (292,529) (164,042) - - Gain on disposal of property, plant and equipment - (119,999) - - Interest income (96,279) (66,723) - - Rental income from property leases (175,000) (168,000) - - Rental income from equipment leases (46,250) (44,400) - - Reversal of impairment loss on receivables (4,803,221) - - - Reversal of provision for doubtful debts (10,000) (116,600)Reversal of trade payables (5,941,335) (1,267,484) - -

19. INCOME TAX EXPENSE

Group Company2012 2011 2012 2011

Note RM RM RM RM

Current tax expenseMalaysian - current 1,529,000 1,265,497 - -

- prior year 53,011 - (40,857) -

Total current tax expense 1,582,011 1,265,497 (40,857) -

Deferred tax expenseOrigination and reversal of temporary differences 1,000,286 - - - Overprovision in prior years (424,358) - - -

Total deferred tax expense 9 575,928 - - -

Total tax expense 2,157,939 1,265,497 (40,857) -

Reconciliation of effective tax expenseProfit/(Loss) excluding tax 6,924,415 2,484,619 (281,578) (290,098)

Tax at Malaysian tax rate of 25% (2011:25%) 1,731,104 621,155 (70,395) (72,524)Non-deductible expenses 871,314 1,367,795 70,395 72,524 Non-taxable income (73,132) (723,453) - -

2,529,286 1,265,497 - - Under/(Over) provision in prior years:- tax expense 53,011 - (40,857) - - deferred tax expense (424,358) - - -

2,157,939 1,265,497 (40,857) -



20. EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share

The calculation of basic earnings per ordinary share at 31 December 2012 was based on the profit attributable to ordinaryshareholders of RM4,766,476 (2011: RM1,219,122) and 136,483,676 (2011: 136,483,676) ordinary shares outstanding duringthe year.

21. KEY MANAGEMENT PERSONNEL COMPENSATION

Group Company2012 2011 2012 2011

RM RM RM RM

Directors- remuneration 354,000 354,000 150,000 150,000 - other short term employee benefits 24,480 24,480 - -

22. SEGMENT REPORTING

No segmental information is disclosed as the Group only engages in the construction and trading of products in Malaysia.

23. FINANCIAL INSTRUMENTS

23.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

(a) Loans and receivables (L&R);(b) Available-for-sale financial assets (AFS); and(c) Other liabilities (OL)

Carryingamount L&R OL AFS

RM RM RM RM

31.12.2012GroupFinancial assetsAvailable for sale financial assets 2,113,918 - - 2,113,918 Trade and other receivables 143,735,797 143,735,797 - -

145,849,715 143,735,797 - 2,113,918

Financial liabilitiesLoans and borrowings 6,859,485 - 6,859,485 - Trade and other payables 42,082,320 - 42,082,320 -

48,941,805 - 48,941,805 -



23. FINANCIAL INSTRUMENTS (CONTINUED)

23.1 Categories of financial instruments (continued)


RM RM RM RM

31.12.2012CompanyFinancial assetsTrade and other receivables 3,118,849 3,118,849 - -

Financial liabilitiesOther payables 180,000 - 180,000 -

31.12.2011GroupFinancial assetsAvailable-for-sale financial assets 4,788,707 - - 4,788,707 Trade and other receivables 149,699,366 149,699,366 - -

154,488,073 149,699,366 - 4,788,707


69,068,250 - 69,068,250 -

CompanyFinancial assetsTrade and other receivables 3,324,547 3,324,547 - -

Financial liabilitiesOther payables 179,926 - 179,926 -




23.1 Categories of financial instruments (continued)


RM RM RM RM

1.1.2011GroupFinancial assetsAvailable-for-sale financial assets 10,237,210 - - 10,237,210 Trade and other receivables 147,455,263 147,455,263 - -

157,692,473 147,455,263 - 10,237,210


72,846,260 - 72,846,260 -

CompanyFinancial assetsTrade and other receivables 3,587,641 3,587,641 - -

Financial liabilitiesOther payables 2 - 2 -

23.2 Net gain arising from financial instruments

2012 2011RM RM

GroupAvailable-for-sale financial assets- recognised in other comprehensive income (234,378) (1,369,737)- reclassified from equity to profit or loss 3,071,202 - - effect of adopting MFRS 139 (3,842,009) -

(1,005,185) (1,369,737)

23.3 Financial risk management

The Group and the Company has exposure to the following risks from its use of financial instruments:• Credit risk• Liquidity risk• Market risk




23.4 Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet itscontractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers, amountdue from related companies and investment securities. The Company’s exposure to credit risk arises principally from amountdue from subsidiaries.

Receivables

Risk management objectives, policies and processes for managing the risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by thecarrying amounts in the statement of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due or impaired are stated at theirrealisable values. A significant portion of these receivables are regular customers that have been transacting with the Group.The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balancespast due more than 120 days, which are deemed to have higher credit risk, are monitored individually.

Impairment losses

The ageing of receivables as at the end of the reporting period was:

CollectiveGross impairment Net

RM RM RM

31.12.2012Not past due 46,068,349 - 46,068,349 Past due 31-180 days 26,284,557 - 26,284,557 Past due 181-364 days 17,211,537 - 17,211,537 Past due more than 365 days 70,840,862 (17,883,995) 52,956,867

160,405,305 (17,883,995) 142,521,310

31.12.2011Not past due 63,257,023 - 63,257,023 Past due 31-180 days 31,784,539 - 31,784,539 Past due 181-364 days 10,990,182 - 10,990,182 Past due more than 365 days 65,683,724 (22,197,216) 43,486,508

171,715,468 (22,197,216) 149,518,252

1.1.2011Not past due 86,833,030 - 86,833,030 Past due 31-180 days 34,797,003 - 34,797,003 Past due 181-364 days 29,959,505 (4,427,838) 25,531,667 Past due more than 365 days 16,230,126 (16,230,126) -

167,819,664 (20,657,964) 147,161,700




23.4 Credit risk (continued)

The movements in the allowance for impairment losses of trade receivables during the year were:

31.12.2012 31.12.2011 1.1.2011RM RM RM

At 1 January 22,197,216 20,657,964 15,826,300 Allowance for doubtful debts 500,000 500,000 - Impairment loss recognised - 1,155,852 4,831,664 Reversal of doubtful debts (10,000) (116,600) - Reversal of impairment losses (4,803,221) - -

At 31 December 17,883,995 22,197,216 20,657,964

No further impairment losses are provided as management is confident that the balances due is recoverable.

The allowance account in respect of receivables is used to record impairment losses. Unless the Group is satisfied thatrecovery of the amount is possible, the amount considered irrecoverable is written off against the receivable directly.

Financial guarantees


The Group provides unsecured financial guarantees to banks in respect of banking facilities granted to a subsidiary. TheGroup monitors on an ongoing basis the results of the subsidiary and repayments made by the subsidiary.

Exposure to credit risk, credit quality and collateral

The maximum exposure to credit risk amounts to RM6,859,485 representing the outstanding banking facilities of thesubsidiary as at the end of the reporting period.

As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.

The financial guarantees have not been recognised since the fair value on initial recognition was not material.

23.5 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposureto liquidity risk arises principally from its various payables and loans




23.5 Liquidity risk (continued)

Maturity analysis

The table below summarises the maturity profile of the Group’s financial liabilities as at the end of the reporting date basedon undiscounted contractual payments:

ContractualCarrying interest Contractual Under 1 1-2amount rate flows year years

RM % RM RM RM

31.12.2012Banker acceptance 2,618,000 8.60 2,843,148 2,843,148 - Finance lease liabilities 155,911 2.70 160,121 105,398 54,723 Bank overdrafts 4,085,574 9.10 4,457,361 4,457,361 - Trade and other payables 42,082,320 - 42,082,320 42,082,320 -

48,941,805 49,542,950 49,488,227 54,723

31.12.2011Banker acceptance 3,138,000 8.60 3,407,868 3,407,868 - Finance lease liabilities 253,284 2.70 260,123 100,003 160,120 Bank overdrafts 4,560,764 8.60 4,952,990 4,952,990 - Trade and other payables 61,116,202 - 61,116,202 61,116,202 -

69,068,250 69,737,183 69,577,063 160,120

1.1.2011Banker acceptance 3,076,000 8.30 3,331,308 3,331,308 - Bank overdrafts 3,929,195 8.30 4,225,318 4,225,318 - Trade and other payables 65,841,065 - 65,841,065 65,841,065 -

72,846,260 73,397,691 73,397,691 -

23.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices will affectthe Group’s financial position or cash flows.

Interest rate risk

The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Shortterm receivables and payables are not significantly exposed to interest rate risk.


In managing the risks, the Company maintain a balance portfolio of fixed and floating rate instruments. All interest rate aremonitored and managed proactively by the management.




23.6 Market risk (continued)

Exposure to interest rate risk

The interest rate profile of the Group’s significant interest-bearing financial instruments, based on carrying amounts as atthe end of the reporting date was:

31.12.2012 31.12.2011 1.1.2011RM RM RM

Fixed rate instrumentsFinancial assets 1,252,580 2,331,015 2,265,922 Financial liabilities (155,911) (253,284) -

1,096,669 2,077,731 2,265,922

Floating rate instrumentsFinancial liabilities 6,703,574 7,698,764 6,705,195

Interest rate risk sensitivity analysis

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and theGroup does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, achange in interest rates at the end of the reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points (bp) in interest rates at the end of the reporting date would have increased/(decreased) equityand post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreigncurrency rates, remain constant.

Profit or loss100 bp 100 bp

increase decreaseRM RM

2012Floating rate instrument (50,277) 50,277

2011Floating rate instrument (57,740) 57,740




23.7 Other price risk

Equity price risk arises from the Group’s investments in equity securities.


Management of the Group monitors the equity investments on a portfolio basis. Material investments within the portfolio aremanaged on an individual basis and all buy and sell decisions are approved by the Investment Committee of the Company.

Equity price risk sensitivity analysis

This analysis assumes that all other variables remain constant and the Group’s equity investments moved in correlation withFTSE Bursa Malaysia KLCI (FBMKLCI).

A 10 percent strengthening in FBMKLCI at the end of the reporting period would have increased equity by RM211,392 andpost tax profit or loss by RM476,648. At 10 percent weakening in FBMKLCI would have had equal but opposite effect onequity and profit or loss respectively.

23.8 Fair value of financial instruments

The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowingsapproximate fair values due to the relatively short term nature of these financial instruments.

It was not practical to estimate the fair value of the Group’s investment in unquoted shares due to the lack of comparablequoted market price and the inability to estimate fair value without incurring excessive cost.

Investments in equity securities

The fair values of financial assets that are quoted in an active market are determined by reference to their quoted closingbid price at the end of the reporting date.

Fair value hierarchy

The fair value measurement hierarchy for financial instrument stated in the statement of financial position are as follows:

• Level 1 : quoted price (unadjusted) in active market for identical assets or liabilities• Level 2 : Inputs others than quoted price included within Level 1 that are observable for the asset and liability, either

directly (that in as prices) or indirectly (that is derived from prices)• Level 3 : Inputs for the asset or liability that are not based on observable market data (that is unobservable inputs)

Available-for-sale financial assets

Group 31.12.2012 31.12.2011 1.1.2011RM RM RM

Level 1 2,113,918 4,788,707 10,237,210



24. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to maintain on optimal capital structure in order to support its businessand maximise shareholder value. The Group manages its capital structure and make adjustments to it, in light of changes in economiccondition. To maintain or adjust its capital structure, the Group may adjust the dividend payment to shareholders, return capital toshareholders or issue new shares.

The Group monitors capital using a gearing ratio, which is the net debt divided by total equity plus net debt. Net debt includes loansand borrowing, less cash and bank balances and short term deposits. Capital of the Group represents total equity.

The debt to equity ratio as at 31 December 2012, 31 December 2011 and 1 January 2011 are as follows:

31.12.2012 31.12.2011 1.1.2011Note RM RM RM

Loans and borrowings 14 6,859,485 7,952,048 7,005,195 Less: Cash and bank balances 12 (55,152) (54,345) (973,483)Less: Short term deposits 12 (1,252,580) (2,331,015) (2,265,922)

Net debt 5,551,753 5,566,688 3,765,790

Total equity 114,188,843 106,585,543 106,736,158

Capital and net debt 119,740,596 112,152,231 110,501,948

Gearing ratio 5% 5% 3%

25. OPERATING LEASES

Leases as lessor

The Group leases out its property, plant and equipment under operating leases. The future minimum lease payments under non-cancellable leases are as follows:

2012 2011RM RM

Less than one year 223,020 221,250 Between 1 to 5 years 37,170 260,190

260,190 481,440



26. CONTINGENCIES

The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrificeof economic benefits will be required or the amount is not capable of reliable measurement.

Group Company2012 2011 2012 2011

RM RM RM RM

Contingent liabilitiesCorporate guarantee given to supplier for facilities granted to a subsidiary company - - 17,830,000 17,830,000

Corporate guarantee given to financial institutions for facilities granted to a subsidiary company - - 7,900,000 7,900,000

Payment guarantees issued in the form of bank guarantee given to suppliers by a subsidiary company 100,000 100,000 - -

100,000 100,000 25,730,000 25,730,000

27. RELATED PARTIES

Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directlyor indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or viceversa, or where the Group and the party are subject to common control or common significant influence. Related parties may beindividuals or other entities.

Key management personnel are defined as those persons having authority and responsibility for planning, directing and controllingthe activities of the Company either directly or indirectly. The key management personnel includes all the Directors of the Company.

The Company has related party transactions with the following companies, which are deemed related to the Directors as follows:

i) Lebar Daun Development Sdn. Bhd. in which Dato’ Noor Azman @ Noor Hizam bin Mohamed Nurdin; and Norazmi binMohamed Nurdin are common Directors;

ii) Basco Sdn. Bhd. is deemed related to Dato’ Noor Azman @ Noor Hizam bin Mohamed Nurdin; and

iii) Bina-mas Construction and Landscape Sdn. Bhd. is deemed related to Norazmi bin Mohamed Nurdin.



27. RELATED PARTIES (CONTINUED)

The significant related party transactions of the Group, other than key management personnel compensation (see note 21), are asfollows:

(Reversal of Impairment) /

Amount Impairmenttransacted Gross Allowance Net loss

for balance for balance recognisedthe year outstanding impairment oustanding for the year

ended 31 at 31 loss at 31 at 31 ended 31December December December December December

2012Related partiesRevenue 53,372,350 147,216,281 16,718,528 130,497,753 (4,803,221)Rental income 221,250 - - - - Construction cost (727,930) 2,014,074 - 2,014,074 -

2011Related partiesRevenue 68,978,333 153,368,268 21,521,752 131,846,516 1,155,852 Rental income 212,400 - - - - Construction cost (6,756) 2,742,004 - 2,742,004 -

The above transactions have been entered into in the normal course of business and have been established on a negotiated basis.

28. EFFECT OF ADOPTION MFRS 139

During the year, the Group made adjustments relating to the effect of adoption of MFRS 139 for recognition of fair value of availablefor sale investment which was previously recognised in the statement of comprehensive income.

As at Effect of As at 1 January 2012 adoption1 January 2011

The Group -previously stated MFRS 139 -as restated

Fair value reserve - (3,842,009) (3,842,009)

Retained earnings 27,865,759 3,842,009 31,707,768



29. SUPLEMENTARY INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS OR LOSSES

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2012, into realised and unrealisedprofits, pursuant to paragraph 2.06 and 2.23 of Bursa Malaysia Securities Berhad Listing Requirements and in accordance with theGuidance on Special Matter No. 1, Determination of Realised and Unrealised Profits and Losses as issued by the Malaysian Instituteof Accountants, is as follows:

Group Company2012 2012

RM RM

Total retained earnings/(accumulated losses) of the Company and its subsidiaries:- realised 39,941,287 (1,097,993)- unrealised (3,467,043) (200,000)

36,474,244 (1,297,993)

The disclosure of realised and unrealised above is solely for compliance with the directive issued by the Bursa Malaysia SecuritiesBerhad and should not be used for any other purpose.



Authorised Share Capital : RM250,000,000.00Issued and Paid Up Capital : RM68,241,837.50Class of Shares : Ordinary Shares of RM0.50 eachVoting Rights : One (1) vote per Ordinary ShareNo. of Shareholders : 2,430

DISTRIBUTION OF SHAREHOLDINGS

Size of Holdings No. of Shareholders % No. of Shares %

Less than 100 1,441 59.30 30,034 0.02100 – 1,000 878 36.13 150,078 0.111,001 – 10,000 47 1.93 183,180 0.1410,001 – 100,000 33 1.36 1,255,879 0.92100,001 – less than 5% of issued shares 27 1.11 59,047,504 43.265% and above of issued shares 4 0.16 75,817,000 55.55

Total 2,430 100.00 136,483,675 100.00

DIRECTORS’ SHAREHOLDINGS

Direct IndirectName of Directors No. of Shares % No. of Shares %

1. Norazmi Bin Mohamed Nurdin 5,016,000 3.68 - -2. Tan Sri Datuk Adzmi Bin Abdul Wahab - - - -3. Dato’ Nik Ismail Bin Dato’ Nik Yusoff - - - -4. Dato’ Noor Azman @ Noor Hizam Bin Mohd Nurdin 62,817,000 46.02 9,000,000 6.59(1)

5. Hazli Bin Ibrahim 554,400 0.41 157,000 0.12(2)

6. Noorazhar Bin Mohamed Nurdin 254,800 0.19 - -

Notes:-

(1) Deemed interest by virtue of his spouse, Datin Nor Hayati bt Abd Malik’s direct shareholdings in Lebtech Berhad(2) Deemed interest by virtue of Section 6A(4) of the Companies Act, 1965 through his shareholdings in Cherry Vista Sdn. Bhd.

SUBSTANTIAL SHAREHOLDERS

Direct Indirect Name of Shareholders No. of Shares % No. of Shares %

1. Dato’ Noor Azman @ Noor Hizam Bin Mohd Nurdin 62,817,000 46.02 9,000,000 6.59(1)

2. Norazlan Bin Mohamad Nordin 9,048,000 6.63 23,000 0.02(2)

3. Datin Nor Hayati Bt Abd Malik 9,000,000 6.59 62,817,000 46.02(3)

Notes:-

(1) Deemed interest by virtue of his spouse, Datin Nor Hayati bt Abd Malik’s direct shareholdings in Lebtech Berhad(2) Deemed interest by virtue of his spouse, Fatmawati bt Kasbin’s direct shareholdings in Lebtech Berhad(3) Deemed interest by virtue of her spouse, Dato’ Noor Azman @ Noor Hizam bin Mohd Nurdin’s direct shareholdings in Lebtech

Berhad

ANALYSIS OFSHAREHOLDINGSAS AT 8 MAY 2013


LIST OF THIRTY LARGEST SHAREHOLDERS

Name of Shareholders No. of Shares %

1. CIMSEC Nominees (Tempatan) Sdn. Bhd. 39,243,000 28.75(CIMB for Noor Azman @ Noor Hizam Bin Mohd Nurdin)

2. RHB Capital Nominees (Tempatan) Sdn. Bhd. 18,574,000 13.61(Pledged securities account for Noor Azman @ Noor Hizam Bin Mohd Nurdin)

3. RHB Capital Nominees (Tempatan) Sdn. Bhd. 9,000,000 6.59(Pledged securities account for Nor Hayati Binti Abd Malik)

4. RHB Capital Nominees (Tempatan) Sdn. Bhd. 9,000,000 6.59(Pledged securities account for Norazlan Bin Mohamad Nordin)

5. Shah Rudin Bin Mohammed Miskun 6,500,004 4.76

6. HSBC Nominees (Asing) Sdn. Bhd. 6,053,600 4.44(Exempt An for credit SUISSE)

7. Mohd Nasir Bin Mohd Miskun 5,800,000 4.25

8. Mustafa Bin Mohammed Miskun 5,800,000 4.25

9. Nor Lia Binti Johan 5,300,000 3.88

10. AllianceGroup Nominees (Tempatan) Sdn. Bhd. 5,000,000 3.66(Pledged securities account for Noor Azman @ Noor Hizam Bin Mohd Nurdin)

11. Anuar Bin Abd Malik 4,500,000 3.30

12. Mustapah Bin Mohamed 3,168,600 2.32

13. RHB Capital Nominees (Tempatan) Sdn. Bhd. 3,000,000 2.20(Pledged securities account for Norazmi Bin Mohamed Nurdin)

14. Perbadanan Setiausaha Kerajaan Selangor 2,819,800 2.07

15. CIMSEC Nominees (Asing) Sdn. Bhd. 1,943,600 1.42(Bank of Singapore Limited for Stardom East Holdings Limited)

16. AllianceGroup Nominees (Tempatan) Sdn. Bhd. 1,800,000 1.32(Pledge securities account for Norazmi Bin Mohamed Nurdin)

17. Abu Sujak Bin Mahmud 1,174,600 0.86

18. Perbadanan Kemajuan Negeri Selangor 1,000,000 0.73

19. Mohd Don Bin Mastol @ Mastor 944,900 0.69

20. Mhd Omar Bin Abdul Hamid 858,300 0.63

21. Faizal Bin Abdullah 672,000 0.49

22. Hazli Bin Ibrahim 499,400 0.37

23. BIMSEC Nominees (Tempatan) Sdn. Bhd. 436,400 0.32(Pledged securities account for Mohd Johar Bin Ismail)

24. Jamil Bin Saimon 406,400 0.30

25. Ikmal Bin Ibrahim 390,800 0.29

26. RHB Capital Nominees (Tempatan) Sdn. Bhd. 254,800 0.19(Pledged securities account for Noorazhar Bin Mohamed Nurdin)

27. AMBank (M) Berhad 216,000 0.16(Pledged securities account for Norazmi Bin Mohamed Nurdin)

28. Cherry Vista Sdn. Bhd. 157,000 0.12

29. CIMB Group Nominees (Tempatan) Sdn. Bhd. 140,000 0.10(Pledged securities account for Anuar Bin Abd Malik)

30. RHB Capital Nominees (Tempatan) Sdn. Bhd. 105,900 0.08(Pledged securities account for Ab Ghaus Bin Ismail)

TOTAL 134,759,104 98.74

ANALYSIS OFSHAREHOLDINGSAS AT 8 MAY 2013 (CONTINUED)


Approximate Land Area/ Net BookAge of Built–up Value at

Description/ Buildings Area 31.12.2012 Date ofLocation Tenure Existing Use (Years) (Sq. m.) (RM’000) Acquisition

No. 2, Jalan Tengku Leasehold 31/2 Storey 11 254/935 1,640 14/10/2002Ampuan Zabedah J9/J 99 years CornerSection 9 Expiring on Shop/Office40000 Shah Alam 20/12/2100 BuildingSelangor Darul Ehsan

No. 4, Jalan Tengku Leasehold 31/2 Storey 11 153/599 1,230 14/10/2002Ampuan Zabedah J9/J 99 years IntermediateSection 9 Expiring on Shop/Office40000 Shah Alam 20/12/2100 BuildingSelangor Darul Ehsan

Lot 9024 Freehold 4 Storey 20 156/603 170 09/12/1996Jalan Mahang Satu (end lot)Taman Meru Utama Shop Office41050 KlangSelangor Darul Ehsan

Lot 9026 Freehold 4 Storey 20 156/603 170 09/12/1996Jalan Mahang Satu IntermediateTaman Meru Utama Shop Office41050 KlangSelangor Darul Ehsan

Lot 9028 Freehold 4 Storey 20 156/603 170 09/12/1996Jalan Mahang Satu IntermediateTaman Meru Utama Shop Office41050 KlangSelangor Darul Ehsan

Note:- The above properties were registered under the name of Lebtech Construction Sdn Bhd, a wholly-owned subsidiary of theCompany.

LIST OFPROPERTIESAS AT 31 DECEMBER 2012


NOTICE IS HEREBY GIVEN that the Eleventh Annual General Meeting of Lebtech Berhad will be held at Gallery 1, Level 3, Concorde Hotel,No. 3, Jalan Tengku Ampuan Zabedah C9/C, 40100 Shah Alam, Selangor Darul Ehsan on Thursday, 20 June 2013 at 11.00 a.m. forthe following purposes:-

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 31 December 2012 together with the Reports of the Directorsand Auditors thereon.

2. To approve the Directors’ fees for the financial year ended 31 December 2012.

3. To re-elect Encik Norazmi Bin Mohamed Nurdin, who retires by rotation in accordance with Article 84 of the Company’s Articles ofAssociation.

4. To re-elect Encik Hazli Bin Ibrahim, who retires by rotation in accordance with Article 84 of the Company’s Articles of Association.

5. To re-appoint Tan Sri Datuk Adzmi Bin Abdul Wahab, who retires in accordance with Section 129(6) of the Companies Act, 1965.

6. To re-appoint Messrs Afrizan Tarmili Khairul Azhar as Auditors of the Company and to authorise the Directors to fix their remuneration.

7. As special business, to consider and if thought fit, to pass the following Ordinary Resolution:-

Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

“THAT subject to the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of the Company and the MainMarket Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and/or itssubsidiary to enter into recurrent related party transactions of a revenue or trading nature with the related parties (“Recurrent RelatedParty Transactions”) as set out in Section 2.3 of the Circular to Shareholders dated 28 May 2013, subject further to the following:-

(i) the Recurrent Related Party Transactions are entered into in the ordinary course of business on terms not more favourable tothe related parties than those generally available to the public, and the Recurrent Related Party Transactions are undertakenon arm’s length basis and are not to the detriment of the minority shareholders of the Company;

(ii) the disclosure is made in the annual report of the breakdown of the aggregate value of the Recurrent Related Party Transactionsconducted pursuant to the shareholders’ mandate during the financial year, amongst others, based on the following information:-

(a) the type of Recurrent Related Party Transactions made; and

(b) the names of the related parties involved in each type of Recurrent Related Party Transactions made and their relationshipwith the Company;

(iii) the shareholders’ mandate is subject to annual renewal and this shareholders’ mandate shall only continue to be in full forceuntil:-

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company, at which this shareholders’ mandate will lapse,unless by a resolution passed at the said AGM, such authority is renewed;

(b) the expiration of the period within which the next AGM of the Company after the date it is required to be held pursuant toSection 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act);or

(c) revoked or varied by resolution passed by the shareholders in a general meeting;

whichever is earlier.

NOTICE OF ANNUAL GENERAL MEETING


(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (includingexecuting all such documents as may be required) as they may consider expedient or necessary to give effect to the RecurrentRelated Party Transactions contemplated and/or authorised by this Ordinary Resolution.”

8. To transact any other ordinary business of which due notice shall have been given.

By Order of the Board

JELITA BINTI MUHAMAD SALLEHMAICSA 7060739Company Secretary

Shah Alam28 May 2013

Notes:-

1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to theCompany.

2. To be valid this form duly completed must be deposited at the registered office of the Company at Wisma Lebar Daun, No. 2, Jalan Tengku AmpuanZabedah J9/J, Seksyen 9, 40000 Shah Alam, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the Meeting orany adjournment thereof.

3. A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the same meeting.

4. Where a member appoints two (2) proxies the appointment shall be invalid unless he specifies the proportion of his holdings to be represented byeach proxy.

5. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one(1) proxy but not more than two (2) proxies in respect of each Securities Account it holds with ordinary shares of the Company standing to the creditof the said Securities Account.

6. If the appointer is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.

Explanatory Note on Special Business

7. The proposed Resolution No. 7, if passed, will allow the Company and/or its subsidiary to enter into recurrent related party transactions of a revenueor trading nature which are necessary for the Group’s day-to-day operations and are in the ordinary course of business and on terms that are notmore favourable to the related parties than those generally available to the public. This would avoid any delay and cost involved in convening separategeneral meetings from time to time to seek shareholders’ approval as and when such recurrent related party transactions occur. This authority,unless revoked or varied by the Company at a General Meeting, will expire at the conclusion of the next Annual General Meeting of the Company orwill subsist until the expiration of the period within which the next Annual General Meeting of the Company is required by law to be held, whicheveris the earlier.

NOTICE OF ANNUAL GENERAL MEETING(CONTINUED)


(Resolution 7)

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETINGPURSUANT TO PARAGRAPH 8.27(2) OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIASECURITIES BERHAD

Details of individuals who are standing for election as Directors

No individual is seeking election as a Director at the Eleventh Annual General Meeting of the Company.

FORM OF PROXY

I/We __________________________________________________________ NRIC No./Company No. _____________________________

of ________________________________________________________________________________________________________________

being a member/members of LEBTECH BERHAD, hereby appoint _________________________________________________________

_______________________________________________________________ NRIC No. __________________________________________

of ________________________________________________________________________________________________________________

or failing whom, _________________________________________________ NRIC No. __________________________________________

of _________________________________________________________________________________________________________________

as my/our proxy to vote for me/us and on my/our behalf at the Eleventh Annual General Meeting of the Company to be held at Gallery 1,Level 3, Concorde Hotel, No. 3, Jalan Tengku Ampuan Zabedah C9/C, 40100 Shah Alam, Selangor Darul Ehsan on Thursday, 20 June2013 at 11.00 a.m. and at every adjournment thereof for/against the resolution(s) to be proposed thereat.

Please indicate with an “X” in the appropriate space how you wish your vote to be cast. Unless voting instructions are specified herein,the proxy will vote or abstain from voting as he thinks fit.

Resolution For Against

No. 1 Receipt of Audited Financial Statements and Directors’ and Auditors’ Reports

No. 2 Approval of Directors’ fees

No. 3 Re-election of Encik Norazmi Bin Mohamed Nurdin as Director

No. 4 Re-election of Encik Hazli Bin Ibrahim as Director

No. 5 Re-appointment of Tan Sri Datuk Adzmi Bin Abdul Wahab as Director

No. 6 Re-appointment of Messrs Afrizan Tarmili Khairul Azhar as Auditors

Special Business:

No. 7 Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

As witness my/our hand this ___________ day of ____________________ 2013

No. of shares held

______________________________Signature/Common Seal

Notes:-1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall

not apply to the Company.2. To be valid this form duly completed must be deposited at the registered office of the Company at Wisma Lebar Daun, No. 2, Jalan

Tengku Ampuan Zabedah J9/J, Seksyen 9, 40000 Shah Alam, Selangor Darul Ehsan not less than forty-eight (48) hours before thetime for holding the Meeting or any adjournment thereof.

3. A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the same meeting.4. Where a member appoints two (2) proxies the appointment shall be invalid unless he specifies the proportion of his holdings to be

represented by each proxy.5. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint

at least one (1) proxy but not more than two (2) proxies in respect of each Securities Account it holds with ordinary shares of theCompany standing to the credit of the said Securities Account.

6. If the appointer is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.

LEBTECH BERHAD(Company No. 590945-H)(Incorporated in Malaysia)

Company Secretary

LEBTECH BERHAD (590945-H)

Wisma Lebar DaunNo. 2, Jalan Tengku Ampuan

Zabedah J9/JSeksyen 9, 40000 Shah Alam

Selangor Darul Ehsan

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LEBTECH BERHAD report/LEBTECH... · He served PROTON in 1985 to 1992 and his last position in ... Berhad, Dataprep Holdings ... and currently holding the position of Executive Director

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